Exam 11: Forecasting Financial Requirements

Match the term with its definition. -Statements that project a firm's financial performance and condition, including projected profits, assets and financing requirements, and cash flows

Profits that are retained within the company rather than being distributed to the owners are referred to as retained income.

Even though Miriam projected an annual positive cash flow, she may run out of cash if:

Tomas would like to know whether his new business will be profitable, how much financing he will need, and whether he will have adequate cash flows. Tomas can get this information from:

What are sources of equity ownership in a business? Are these sources cash resources?

Jaime is preparing his forecasts for the coming year. How many scenarios should he prepare when forecasting and budgeting?

A golf club should break down its annual cash budget into shorter time units because

To be realistic, an entrepreneur should project profits only one year into the future.

A firm should finance its growth in such a way as to maintain adequate

After pro forma statements are prepared, they should be checked against actual results every quarter so projections can be modified.

Maria is projecting sales for her company for the upcoming new year. To be financially effective, she

As Willard's business grows and prospers, his company's total assets requirements will equal ___________.

Profits reward an owner for investing in a company and constitute a minor source of financing for future growth.

The term net working capital equals current assets less total liabilities and is a measure of a company's liquidity.

Jill's business has current assets of $50,000 and current liabilities of $25,000. Which statement is true about the company's current ratio?

Tony operates a computer retail business. Based on the industry, how often should sales projections be for the company in projecting sales?

D&R Products forecasts that it will require $10,000 for equipment and depreciation will be over 5 years. The $10,000 will be reflected in the balance sheet as _____.

As her accounts payable and accrued expenses rose along with her firm's sales, Ariel noticed that ________ occurs.

To project pro forma financial statements, speaking to others in the industry and researching industry averages are good starting points.

Mark follows the cash budget like it was carved in stone. He has fallen prey to the one real danger in over-reliance on a cash budget: