Define the terms operating plan and financial plan

Assignment Help Accounting Basics
Reference no: EM131154575

Question 1

Define each of the following terms.

a.Operating plan, financial plan
b. Spontaneous liabilities, profit margin, payout
c.Additional funds needed (AFN; AFN equations capital intensity ratios, self-supporting growth rate.
d. Forecasted financial statement approach using percent of sales
e. Exceed capacity; lumpy assets; economies of scale
f. Full capacity sales target fixed assets/sales ratios required level of fixed assets

Question 2

Name five key factors that affect a firm's external financing requirements?

Question 3

Maggie's muffins, Inc., generated $5,000,000 in sales during 2013, and its year-end total were $2,500,000. Also, at year-end 2013, current liabilities were $1,000,000, consisting of $300,000 of notes payable, $500,000 of accounts payable, and $200,000 of accruals. Looking ahead to 2014, the company estimates that its assets must increase at the same rate as sales, its spontaneous liabilities will increase at the same rate as sales, its profit margin will increase by %7 and its payout ratio will be %80. How large a sales increase can the company achieve without having to raise funds externally-that is, what is its self-supporting growth rate?

Question 4

The Booth Company's sales are forecasted to double from $1,000 in 2013 to $2,000 in 2014. Here is the December 31 2013, balance sheet:

Cash

$ 100

Accounts payable

$ 50

Accounts receivable

200

Notes payable

150

Inventories

200

Accruals

50

Net Fixed assets

500

Long-term debt

400

 


Common Stock

100

 


Retained earnings

250

Total assets

$1,000

Total liabilities and equity

$1,000

Booth's fixed assets were used to only 50% of capacity during 2013, but its current assets were at their proper levels in relation to sales. All assets except fixed assets must increase at the same rate as sales, and fixed assets would also have to increase at the same rate if the current excess capacity did not exist. Booth's after-tax profit margin is forecasted to be 5% and its payout ratio to be 60%. What is booth's additional funds needed (AFN) for the coming year?

Reference no: EM131154575

Questions Cloud

Identify the key product streams of samsung : Identify the key product streams of Samsung and the value they add to their customers.- Analyse the design and nature of Samsung's operations:- what are the key processes that are evident?
Analyze the children emotional reaction to the situation : In part 2 of this assignment, analyze the children's emotional reaction to the situation. Using the James-Lange Theory, the Cannon-Bard Theory and/or the Schachter-Singer Theory, explain the emotional experiences of the children
What is a free trade agreement : What is a free trade agreement (FTA)? What benefits and drawbacks do regional FTAs such as NAFTA offer to each of its member nations? Why have U.S. trade unions traditionally lobbied against FTAs? How do you feel about them?
Find the charge flowing and the number of electrons : A current i(t) = 20 cos(2π × 60)t A flows through a wire. Find the charge flowing, and the number of electrons per second that are passing some point in the wire.
Define the terms operating plan and financial plan : Define the terms Operating plan, financial plan, Spontaneous liabilities, profit margin, payout and Additional funds needed (AFN; AFN equations capital intensity ratios, self-supporting growth rate.
Analyze works of literature that you have become interested : make sure that I know that YOU know why one writer is a Romantic and another a Modernist, or whether he or she deserves a special category. For example, our Chinese and Japanese writers do not fit into any European framework. However, they must ha..
Describing your personality traits based on your findings : Write a 1,050- to 1,400-word paper describing your personality traits based on your findings from the Big Five assessment tool. Include the following in your paper: Summarize your results
Create age appropriate movement activity for early childhood : To practice lesson planning, create an age appropriate movement activity for early childhood-aged students.
Strategies for promoting positive environmental behavior : Evaluate at least two strategies for promoting positive environmental behavior. Explain how positive and negative consequences can increase pro-environmental behavior. Provide examples. Describe at least one positive and one negative example of how t..

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  Interest on savings account with bank of america 100

betty jones files a return as a single taxpayer. items of income received by betty in 2011 were as follows. interest on

  Delmar manufacturing is considering three different prices

delmar manufacturing is considering three different prices for the new personal digital planner 75 65 and 55. variable

  Executives of studio recordings inc produced the latest

executives of studio recordings inc produced the latest compact disc by the starshine sisters band titled

  Read appendix b sample brief memorandum that starts on page

read appendix b sample brief memorandum that starts on page 193 of the textbook. in 2-3 pages 12 point font double

  Accounting changes-error corrections

Molina Company's reported net incomes for 2015 and the previous two years are presented below.

  Naui industries manufacture flowered shirts which normally

naui industries manufacture flowered shirts which normally sell for 24 each. the current unit cost to manufacture each

  Use a financial statements model like the one shown below

Determine the amount of interest expense reported on the 2014 income statement.

  Fireout inc manufactures steel cylinders and nozzles for

fireout inc. manufactures steel cylinders and nozzles for two models of fire extinguishers 1 a home fire extinguisher

  Stegner inc reported net income of 130000 for the year

stegner inc. reported net income of 130000 for the year ended december 31 2008. the following items were included on

  Determine the amount of intra-entity profit at the end

Determine the amount of intra-entity profit at the end of 20X1.

  Main reason for the unfavorable total budget variance

What is the main reason for the unfavorable total budget variance?

  Sam smith invested 17000 in anchor insurance company at the

sam smith invested 17000 in anchor insurance company. at the endof the year smiths investment was worth 19500 becasue

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd