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10-1
Chapter Ten
Financial Projections
Dr. Bruce BarringerUniversity of Central Florida
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Introduction
Sources and uses of funds statement Assumptions sheet Income statements Balance sheets Cash flows Ratio analysis
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Sources and Uses of Funds Statement
The sources and use of funds statement is a document that lays out specifically how much money a firm needs, where the money will come from, and what the money will be used for
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Assumptions Sheet
An assumptions sheet is an explanation of the most critical assumption that your financial statements are based on
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Financial Statements
Income statement Balance sheet Cash flow statement
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Income Statement
Net sales Cost of good
sold Operating
expenses
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Net Sales
Net sales consists of total sales minus allowances for returned goods and discounts
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Cost of Goods Sold
Cost of goods sold includes all the direct costs associated with producing or delivering a product or service, including the material costs and direct labor
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Operating Expenses
Operating expenses include marketing, utilities, and administrative costs not directly related to producing a product or service
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Balance Sheet
A balance sheet is a projection of a firm’s assets, liabilities, and owner’s equity at a specific point in time
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Balance Sheet
Assets Current assets Fixed assets
Liabilities Current liabilities Long-term liabilities Owner’s equity
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Cash Flow
Operating activities
Investing activities
Finance activities
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Operating Activities
Operating activities include net income (or loss), depreciation, and changes in current assets and current liabilities other than cash
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Investing Activities
Investing activities include the purchase, sale, or investment in fixed assets, such as real estate, equipment, and buildings
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Financing Activities
Financing activities include cash raised during the period by borrowing money, making payments on loans, or paying dividends
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One Final Note
Demonstrate the ability to prepare financial statements
Break even analysis
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Ratio Analysis
Profitability Ratios
Liquidity Ratios
Overall Financial Stability
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