Exam 18: Financial Modeling and Pro Forma Analysis

Building a model for long-term forecasting reveals points in the future where the firm will need ________ when retained earnings are not enough to fund planned future investments.

Use the tables for the question(s)below. Pro Forma Income Statement for Ideko,2010-2015 Pro Forma Balance Sheet for Ideko,2010-2015 -Assuming that Ideko has a EBITDA multiple of 9.4,then the continuation EV/Sales ratio of Ideko in 2015 is closest to:

Use the tables for the question(s)below. Pro Forma Income Statement for Ideko,2010-2015 Pro Forma Balance Sheet for Ideko,2010-2015 -Assuming that Ideko has a EBITDA multiple of 8.5,then the continuation levered price-earnings ratio of Ideko in 2015 is closest to:

Compute the after-tax interest expense for a firm with Interest on Excess Cash = $5000,Interest on Debt = $8000,and a tax rate of 30%.

Forecasting a balance sheet with percent of sales method requires two passes a first pass to determine financing needs and a second pass that shows the sources and amounts of financing.

A firm expects growth next year to be 12%.Its sustainable growth rate is 10%.Which of the following is true?

If a firm is planning an expansion or changes in how it manages its inventory,long term financial planning can help determine the impact on the firm's

A firm has $50 million in equity and $20 million of debt,it pays dividends of 30% of net income,and has a net income of $10 million.What is the firm's sustainable growth rate?

What is common starting point for forecasting?

For valuing a planned expansion,in addition to forecasting cash flows we need to estimate the firm's continuation value.

The ________ method assumes that as sales grow,many income statement and balance sheet items will grow,remaining the same percent of sales.

LG Inc.has done a long-term forecast of its balance sheet.The projected total assets for the next year are $300 million.The current liabilities are projected to be $170 million and other long term liabilities are $70 million.How net new financing is needed in the following year?

One of the shortcomings of the percent of sales method is that it does not account for the fact that capacity changes are lumpy and not incremental.

Use the information about Billy's Burgers to answer the following question(s): Billy's Burgers -Using the percent of sales method,and assuming 20% growth in sales,estimate Billy's Burgers' depreciation for 2011.

Use the tables for the question(s)below. Estimated 2011 Income Statement and Balance Sheet Data for Ideko Corporation The following are financial ratios for three comparable companies: -Based upon the average EV/Sales ratio of the comparable firms,if Ideko holds $6.5 million of cash in excess of its working capital needs,then Ideko's target market value of equity is closest to:

How do we compute net new financing?

Use the information about Billy's Burgers to answer the following question(s): Billy's Burgers -Using the percent of sales method,and assuming 20% growth in sales,estimate Billy's Burgers' Accounts Receivable for 2011.

Calgary Doughnuts had sales of $200 million in 2007.Its cost of sales were $160 million.If sales are expected to grow at 10% in 2008,compute the forecasted costs using the percent of sales method.

When making long term plans,any increases in ________ and ________ reflect capital structure decisions that require managers to actively raise capital.

When the projected liabilities and equity are greater than the assets,the firm can plan to