In this course, you will :
- Describe the significance of financial statements.
- Analyze the components of a sales forecast.
- Determine the types of impacts that cause changes in financial statement numbers.
- Distinguish the components of a forecasted income statement.
- When reconciling a balance sheet, use the accounting equation.
- Explain what is required to calculate cash flow.
1. Who Uses Forecasted Financial Statements?
- Use the past to understand the future
- Keys to running a business
- Financial forecasts and loans
- Financial forecasts and investment decisions
- Use financial forecasts to understand new information
2. It All Starts with an Accurate Sales Forecast
- IBM and the famously bad sales forecast
- Combine historical trends with current plans
- Incorporate seasonal patterns and recent developments
- The costs of being wrong
3. What Causes Financial Statement Numbers to Change?
- Home Depot 1985: Three weeks to live
- The impacts of natural changes
- The impacts of long-term planning decisions
- The impacts of financing choices
4. Constructing a Forecasted Income Statement
- The Gap and predictable change
- Forecasting sales-based expenses
- Fixed costs and variable costs
- Forecasting interest and income taxes
5. Constructing a Forecasted Balance Sheet
- The power of the accounting equation
- Identifying the missing number
- Easy "plugs": Cash, investments, paid-in capital
- Realistic but challenging "plug": Loans
6. Constructing a Forecasted Statement of Cash Flows
- The Home Depot story revisited
- How to deduce cash flows
- Forecasting operating cash flow
- Forecasting investing cash flow
- Financing cash flow