lecture 10 - prospective analysis - forecasting

7/23/2019 Lecture 10 - Prospective Analysis - Forecasting

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LECTURE 10PROSPECTIVE ANALYSIS

FORECASTING

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2/15

What is prospective aa!"sisTechi#$es o% %orecasti& Pro'ecte( )acia! state*ets

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3/15

Prospective aa!"sis s$**arises theaa!"st+s %or,ar( !oo-i& vie,s

T,o .asic tas-s Forecasti&/ pro %or*a )acia! state*ets are

the aa!"tica! too! $se( to s$**arie aa!"st+spro'ectios

Va!$atio/ pro'ecte( (ata are $se( as ip$t tova!$atio

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4/15

Forecasti& i*p!ies a s$**ar" o% ,hat,e have !eare(/ $siess aa!"sis Acco$ti& aa!"sis Fiacia! aa!"sis

Overa!! str$ct$re e co*prehesive Re!" o -e" (rivers/ sa!es &ro,ths2 asset

t$rover2 pro)t *ar&i

Cash 3o,s %orecasts are or*a!!"(erive( %ro* acco$ti& $*.ers

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5/15

The o.'ective o% %orecasti& is to pro($cere!ia.!e a( rea!istic e4pectatios o% %$t$reeari&s2 cash 3o,s a( (ivi(e(s5

Forecasts sho$!( .e co*prehesive Forecasts *$st have cosistet

ass$*ptios a( re!atios Forecasts *$st re!" o ass$*ptios that

have itera! a( e4tera! va!i(it"5

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6/15

15 Pro'ecti& operati& reve$es65 Pro'ecti& operati& e4peses

75 Pro'ecti& assets

85 Pro'ecti& the operati& !ia.i!ities a( )acia!

!evera&e a( capita! str$ct$re95 Pro'ecti& iterest e4pese2 iterest ico*e2

o:rec$rri& ite*s2 ico*e ta42 Net ico*e2;ivi(e(s a( cha&es i Retaie( Eari&s5


7/15

Sa!es pro'ectio =sa!es vo!$*es a( prices> ?istorica! tre(s

E4pecte( !eve! o% *acroecoo*ic activit"

The co*petitive !a(scape

Strate&ic iitiatives o% *aa&e*et

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8/15

I% o cha&e i re!atio .et,ee e4pesesa( sa!es is aticipate(2 operati&e4peses are %orecaste( $si& co**o:sie

I case operati& e4peses ic!$(e varia.!ea( )4e( co*poets2 separate sche($!eca .e $se( %or %orecasti&5

?istorica! &ro,th rate %or operati&

e4peses ca a!so .e $se(5

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9/15

Pro'ecti& cash/ Use %orecaste( sa!es a( $*.er o% (a"s o% sa!es

i cash to co*p$te avera&e .a!ace i cash

Or cash is a p!$& i =ot ver" co**o>

Pro'ecti& acco$t receiva.!e Usi& avera&e receiva.!e t$rover rate to pro'ect

avera&e receiva.!e a( co*p$te the i*p!ie("ear:e( .a!ace5

Pro'ecti& ivetories Usi& avera&e ivetor" t$rover rate to pro'ect

avera&e ivetor" a( co*p$te the i*p!ie( "ear:e( .a!ace5

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10/15

Pro'ecti& other c$rret assets These ite*s ca var" i re!atio to the !eve! o%

operati& activit" =sa!es or tota! assets>5

Pro'ecti& PPE Forecast capita! e4pe(it$re i re!atio to the

!eve! o% sa!es a( co*p$te the .a!ace o% PPE

Co*p$te (epreciatio o .a!ace o% PPE a((eter*ie et .oo- va!$e5

Pro'ecti& other o:c$rret assets Forecast other o:c$rret assets i re!atio to

the !eve! o% sa!es5

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11/15

Pro'ecti& acco$ts pa"a.!e Usi& avera&e pa"a.!e t$rover rate to pro'ect

avera&e pa"a.!e a( co*p$te the i*p!ie( "ear:e( .a!ace5

Pro'ecti& accr$e( !ia.i!ities Forecasti& accr$e( !ia.i!ities i re!atio to sa!es

&ro,th Pro'ecti& short ter* .orro,i&s

Ca .e %orecaste( as @ o% tota! assets

Pro'ecti& !o& ter* (e.t Ca .e %orecaste( as @ o% tota! assets

Pro'ecti& other o:c$rret !ia.i!ities Forecasti& i re!atio to sa!es &ro,th

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12/15

Pro'ecti& co**o stoc- Ass$*e iitia! esti*ate o% co**o stoc- is e#$a!

to the prior "ear+s .a!ace $!ess the" havesi&i)cat cha&e

Pro'ecti& retaie( eari&s Ass$*e retaie( eari&s are e#$a! to the prior

"ear+s .a!ace p!$s =*i$s> et pro)t =!oss> a(!ess e4pecte( (ivi(e(s5

Pro'ecti& other e#$it" acco$ts Ass$*e other e#$it" acco$ts are e#$a! to the

prior "ear+s .a!ace $!ess the" have e4hi.ite(oticea.!e tre(s5

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13/1513

Pro'ecti& iterest e4pese .ase( o avera&eiterest:.eari& (e.t $si& avera&e iterest rate o

(e.t

Pro'ect ta4 e4peseas a avera&e o% historica!ta4 e4pese to pre:ta4 ico*e

a!aci& ite*s ca .e ar-eta.!e sec$rities

Short ter* or !o& ter* (e.t

;ivi(e(s or treas$r" stoc-


14/15

The pro'ecte( state*et o% cash 3o,s isprepare( $si& the pro'ecte( ico*estate*et a( the pro'ecte( .a!ace sheet

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15/15

Pro.!e* 105B Pro.!e* 10510 Pro.!e* 10511

Pro.!e* 10516 E4ce! pro.!e* 1051

lecture 10 - prospective analysis - forecasting

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