MF620: Financial Statement Development and Analysis

MF620 Financial Statement Development and Analysis. Lesson 4: Long Term Financing. Activity 4:  Long Term Financing (4 pages, 100 points). Choose a publicly traded company on which to focus, modeled on the Walmart analysis in chapter 14.

MF620: Financial Statement Development and Analysis

MF620 Financial Statement Development and Analysis

Lesson 4: Long Term Financing

Activity 4:  Long Term Financing (4 pages, 100 points)
Choose a publicly traded company on which to focus, modeled on the Walmart analysis in chapter 14.

Part A         Project an income statement for next year for the firm based on your assessment of revenue growth, key projected financial ratios, and any other key assumptions, making sure to justify any assumptions.

Firstly, What is your projection for net income and how does it compare with the previous year?
Secondly, Based on your assessment of anticipated dividends, what is your projection for a change in retained earnings?

Part B         Project a balance sheet for next year for the firm based on your assessment of the change in retained earnings, key projected financial ratios, and any other key assumptions, making sure to justify any assumptions. Additionally, use external borrowing as your balancing “plug.” What is your assessment of the firm’s financial needs?

Part C         Based on your projection of financial needs, what recommendation would you make to the firm—for example, how to meet increased financing needs or what to do with excess financial capacity?

More details;

What is Project balance sheet?

Forecasting 
Balance Sheet

A projected balance sheet, also referred to as pro forma balance sheet, lists specific account balances on a business’ assets, liabilities and equity for a specified future time.

How do you make a project balance sheet?

Follow these steps to forecast a balance sheet:

Firstly, forecast Net Working Capital. To begin forecasting a balance sheet, you’ll first need to estimate your business’s net working capital.

Secondly, Project Fixed Assets.

Thirdly, Estimate Financial Debt.

Fourthly, Forecast Equity Position.

Further, forecast Cash Position.

Grading Rubric:
Please refer to the rubric on the following page for the grading criteria for this assignment.

 

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *