Exam 10: Forecasting Financial Statements

All of the following are the fundamental bases for future payoffs to equity shareholders and share value except:

The following balance sheet and income statement pertain to Goode Corp. ,using the following assumptions complete a forecasted 2013 income statement:

A firm in transition from the high growth to the mature phase of its life cycle,or a firm with significant technological improvements in its production processes,might expect increases in ______________________________ but decreases in sales prices per unit.

As an analyst it is important when projecting sales to make estimates about future changes in sales volume.Compare how you might make estimates about future sales value for a company in a mature industry and one in a rapidly growing industry.

Financial statement forecasts rely on additivity within financial statements and articulation across financial statements.Given this information forecasts of future growth in inventory will most likely affect growth in:

An analyst using the inventory turnover ratio to calculate future levels of inventory may face the that:

If a firm operates at less than full capacity,then price _______________________ are not likely

Sparky's Sparky's sells auto parts.Provided below is selected financial information from the company's 2012 annual report: -Using Sparky's financial information what is the company's inventory turnover ratio for 2012?

A company that has a cost structure in which its costs grow at a lesser rate than its sale enjoys ___________________________________.

Using common-size balance sheet percentages to project individual assets,liabilities,or shareholders' equity has all of the following shortcomings except:

To ensure that the financial statements articulate,it is important that the change in the cash balance on the balance sheet each year agrees with:

Based on the following statement from the text-"to develop forecasts of individual operating assets and liabilities,you must first determine the underlying operating activities that drive them"-explain what those underlying activities are.

It may be difficult to forecast sales for firms with _________________________ patterns because their historical growth rates reflect wide variations in both direction and amount from year to year.

The authors set forth a seven-step forecasting game plan for preparing pro forma financial statements.Discuss the seven steps necessary to prepare the three principal financial statements.

Financial statement forecasts rely on additivity within financial statements and articulation across financial statements.Given this information sales growth forecasts will most likely affect growth in:

Financial statement forecasts should rely on _________________________ across financial statements.

Projected financial statements can be used to assess the sensitivity of all of the following except:

As a firm progresses through the decline life-cycle stage,what type of flexible account will it be more likely to use to balance the balance sheet?

Analysts must develop realistic expectations for the outcomes of future business activities. To develop these expectations,analysts build a set of _____________________________.

Office Mart,Inc.sells numerous office supply products through a national distribution center.The company has focused on maintaining a cash balance equivalent to approximately 14 days of sales.Sales in 2010 amounted to $125,980,673 and the company expects growth in 2011 of 11% and in 2012 of 15%.Given this information determine Office Mart,Inc.'s projected year-end cash balance for 2011 and 2012.