财务管理Chap004

4-2
Chapter Outline
• What Is Financial Planning? • Financial Planning Models: A First Look • The Percentage of Sales Approach • External Financing and Growth • Some Caveats Regarding Financial Planning Models
Less: costs
EBT
(3,300)
2,200
Less: costs
EBT Less: taxes (40% of EBT) Net Income Dividends Add. To RE
(3,000)
2,000 (800)
Chapter 4 Long-Term Financial Planning and Growth
McGraw-Hill/Irwin
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
Key Concepts and Skills
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Elements of Financial Planning
• Investment in new assets – determined by capital budgeting decisions • Degree of financial leverage – determined by capital structure decisions • Cash paid to shareholders – determined by dividend policy decisions • Liquidity requirements – determined by net working capital decisions
4-5
Role of Financial Planning
• Examine interactions – help management see the interactions between decisions • Explore options – give management a systematic framework for exploring its opportunities • Avoid surprises – help management identify possible outcomes and plan accordingly • Ensure feasibility and internal consistency – help management determine if goals can be accomplished and if the various stated (and unstated) goals of the firm are consistent with one another
4-7
Example: Historical Financial Statements
Gourmet Coffee Inc. Balance Sheet December 31, 2009
Gourmet Coffee Inc.
Income Statement For Year Ended December 31, 2009
Percentage of Sales Approach
• Some items vary directly with sales, while others do not • Income Statement
– Costs may vary directly with sales - if this is the case, then the profit margin is constant – Depreciation and interest expense may not vary directly with sales – if this is the case, then the profit margin is not constant – Dividends are a management decision and generally do not vary directly with sales – this influences additions to retained earnings
4-4
Financial Planning Process
• Planning Horizon - divide decisions into short-run decisions (usually next 12 months) and long-run decisions (usually 2 – 5 years) • Aggregation - combine capital budgeting decisions into one large project • Assumptions and Scenarios
– Make realistic assumptions about important variables – Run several scenarios where you vary the assumptions by reasonable amounts – Determine, at a minimum, worst case, normal case, and best case scenarios
4-6
Financial Planning Model Ingredients
• Sales Forecast – many cash flows depend directly on the level of sales (often estimated using sales growth rate) • Pro Forma Statements – setting up the plan using projected financial statements allows for consistency and ease of interpretation • Asset Requirements – the additional assets that will be required to meet sales projections • Financial Requirements – the amount of financing needed to pay for the required assets • Plug Variable – determined by management deciding what type of financing will be used to make the balance sheet balance • Economic Assumptions – explicit assumptions about the coming economic environment
Gourmet Coffee Inc.
– Revenues will grow Pro Forma Income Statement at 15% For Year Ended 2010 (2,000*1.15) – All items are tied Revenues 2,300 directly to sales, and the current relationships are Less: costs (1,840) optimal – Consequently, all Net Income 460 other items will also grow at 15%
Assets
1000 Debt
Equity
400
Revenues 600 Less: costs 1000 Net Income 2000 (1600) 400
Total
1000 Total
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Example: Pro Forma Income Statement
• Initial Assumptions
Pro Forma Balance Sheet – Debt is the plug variable and no Case 2 dividends are paid Assets 1,150 Debt 90 – Debt = 1,150 – Equity 1,060 (600+460) = 90 Total 1,150 Total 1,150 – Repay 400 – 90 = 310 4-10 in debt
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Example: Pro Forma Balance Sheet
• Case I
Gourmet Coffee Inc. Pro Forma Balance Sheet Case 1 1,150 Debt Equity 1,150 Total Gourmet Coffee Inc. 460 690 1,150
• Understand the financial planning process and how decisions are interrelated • Be able to develop a financial plan using the percentage of sales approach • Be able to compute external financing needed and identify the determinants of a firm’s growth • Understand the four major decision areas involved in long-term financial planning • Understand how capital structure policy and dividend policy affect a firm’s ability to grow