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Chapter 15 Brigham Sol Man

Chapter 15 Brigham Sol Man

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Published by Glenn G.
Brigham Solution Manual
Brigham Solution Manual

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Categories:Types, School Work
Published by: Glenn G. on Jul 28, 2013
Copyright:Attribution Non-commercial


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After reading this chapter, students should be able to:
Briefly explain the following terms: mission statement, corporatescope, corporate purpose, corporate objectives, and corporatestrategies.
Briefly explain what operating plans are.
Identify the six steps in the financial planning process.
List the advantages of computerized financial planning models over“pencil-and-paper” calculations.
Discuss the importance of sales forecasts in the financial planningprocess, and why managers construct pro forma financial statements.
Briefly explain the steps involved in the percent of sales method.
Calculate additional funds needed (AFN), using both the projectedfinancial statement approach and the formula method.
Identify other techniques for forecasting financial statementsdiscussed in the text and explain when they should be used.
Learning Objectives:
15 - 1
Chapter 15Financial Planning and Forecasting
In Chapter 3, we looked at where the firm has been and where it is now--itscurrent strengths and weaknesses. Now, in Chapter 15, we look at where it isprojected to go in the future. The details of what we cover, and the way wecover it, can be seen by scanning
, Chapter 15. For othersuggestions about the lecture, please see the “Lecture Suggestions” inChapter 2, where we describe how we conduct our classes.DAYS ON CHAPTER: 3 OF 58 DAYS (50-minute periods)
Lecture Suggestions:
15 - 2
15-1Accounts payable, accrued wages, and accrued taxes increasespontaneously and proportionately with sales. Retained earningsincrease, but not proportionately.15-2The equation gives good forecasts of financial requirements if theratios A*/S
and L*/S
, as well as M and RR, are stable. Otherwise,another forecasting technique should be used.15-3False. At low growth rates, internal financing will take care of thefirm’s needs.15-4False. The use of computerized planning models is increasing.15-5a.+.b.-. The firm needs less manufacturing facilities, raw materials, andwork in process.c.+. It reduces spontaneous funds; however, it may eventuallyincrease retained earnings.d.+.e.+.f.Probably +. This should stimulate sales, so it may be offset inpart by increased profits.g.0.h.+.
 Answers and Solutions:
15 - 3

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