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Studi Finanziari

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FINANCIAL FORECASTING SYSTEM

This essay has summarized on financial forecasting system whereby it has discussed it under three topics namely: rationale for financial forecasting, setting parameters for growth and change in financial forecasting and the building blocks of financial forecasting

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linguaggio		inglese
numero di parole		6274 (ca. 17 pagine)
qualità del contenuto		N/A
livello di linguaggio		N/A
prezzo		gratis
bibliografia		0

Sommario

•TOPIC 1: RATIONALE FOR FINANCIAL FORECASTING 2
•1.0. Definitions 2
•1.2. Financial planning2
•1.3. Forecasting 3
•1.4. Steps involved financial forecasting 4
•1.5. Characteristics of a good forecasting system 4
•1.6. Forecasting methods 5
•1.7. Interpolation vs. extrapolation7
•1.8. The rationale/importance of financial forecasting 7
•TOPIC 2: SETTING PARAMETERS FOR GROWTH AND CHANGE IN FINANCIAL FORECASTING 8
•2.1. Growth forecasting 8
•2.2. Percentage of sales method 8
•2.3. pro-forma financial statements9
•Illustration: pro-forma financial statements 10
•Required: 11
•2.4. The use of the cash and flexile budgets 11
•Illustration: 12
•Cost Budgeted for 12,000 units 12
•2.5. Regression analysis 12
•2.6. Time series analysis 12
•TOPIC 3: BUILDING BLOCKS OF FINANCIAL FORECASTING 13
•3.1. Introduction 13
•3.2. Financial statement analysis13
•3.3. Cross sectional analysis 13
•3.3.1.Common size analysis 13
•3.3.2 Ratio analysis 14
•Cash position ratios 15
•Liquidity ratios 16
•Cash flow/working capital ratios 16
•Capital structure ratios 16
•Debt service or coverage ratios 17
•Profitability ratios 17
•Turnover ratios 18
•Valuation Ratios 18
•3.4. Time series analysis 21
•Uses of time series analysis 21
•Adjustments required when analyzing time series data 21
•Approaches to time series analysis22
•Economic analysis 23
•Visual analysis approach 24

Anteprima della tesi: FINANCIAL FORECASTING SYSTEM

1.0. Definitions
a) Financial planning- his is e process of estimating the funds requirements of a firm and determining the sources of funds. Financial planning indicates a firm’s growth, performance, investments and fund requirements during a given period of time. The ultimate result of financial planning is the preparation of the pro-forma financial statements for he planning horizon.
b) A financial plan- this is a statement of action on the firms financial goals. A financial plan:
Identifies the firm’s financial objectives
Sets down the analysis of the differences between these goals and the current financial situation of he firm
Sets out actions needed for the firm to achieve its desired goals.
c) Financial forecasting- the process of planning which uses pas data to estimate the future financial requirements. It is an integral ...
... deliberate misrepresentation of the timing or amount of transactions or events in the financial statements.
Manipulations can be aimed at:
• Promoting external perception about a firm’s performance
• Maintaining satisfactory industrial relations
• Minimize taxation
• Boosting the compensation of management.
d) The big bath phenomenon-this is the idea that one management encounters a loss; additional steps are taken to increase the magnitude of the loss. This results in the decrease in the current year’s reported income and an increase in such income in the subsequent years. This can e through:
• Creation of provisions for future losses
• Writing down of asset values
• Over provision for bad debts

Tesi presente nelle categorie

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Studi Finanziari

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