...FP/101 Week 2 1. How does a personal cash flow statement help you organize your finances? 2. What was the most interesting thing you learned about completing this worksheet? 3. Did this worksheet provide you with any ideas about how you may want to change your budget (how much you are spending, saving, or reducing your debt)? The cash flow statement can help me organize my finances by being able to see how much money I am spending, and what I am spending it on. The statement breaks down everything from house related payments all the way to leisure activities like video games and movies. Being able to see what I spent my money on will allow me to make changes for the better or, help me to save money by seeing what I could go without and save that money. There have been plenty of times where I go out and spend more than I planned on spending whether it is on food or at the movies. I can use this chart to set up a budget for these sort of activities and not take any more money than what I budget myself spending. The most interesting thing I learned about this worksheet is, it is not just another assignment, but it can be used in everyday life. I like the idea of going to my computer and checking my monthly chart to see how much I have spent that month. Or I could use the chart to see how much money I have left to spend in a month. The cash flow chart is something that can be used in multiple ways to fit different needs...
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...complete the following steps: 1. Financial Reports For the company you have selected, find the most recent annual balance sheet, annual income statement, and annual statement of cash flows. Copy each of these three reports to its own worksheet within a single Excel file. The first worksheet should be titled 20XX Balance Sheet; the second, 20XX Income Statement; the third, 20XX Cash Flow. (Replace the XX with the appropriate year.) The image below illustrates the way the file should be set up 2. Stock Prices Create a fourth worksheet within the same Excel file for historical stock prices. (You can name the worksheet Stock Prices.) • On the Yahoo! Finance page for your company, click the Historical Prices link on the left-hand side. Find the stock prices for the most recent seven weekdays in the Adj Close column. The Adj Close stock price is adjusted for dividends and stock splits. In your Excel file, enter those seven prices. • On the Stock Prices worksheet, use an Excel formula to calculate the stock price’s rate of return over that seven-day period. To do this, 1. Subtract the stock price of the first day from the stock price of the last day. 2. Divide this amount by the stock price from the first day. 3. Multiply by 100 to get the rate of return. 3. Professionalism Format the data on all worksheets so that the file has a neat and professional...
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...Professionals often must create financial models that illustrate historic financial statements along with integrated income statement, balance sheet and cash flow projections for evaluating various types of transactions such as: Sale of the Company Merger of the Company Public or Private Placement of new capital (bank loans, high yield issue, IPO or secondary equity offering, private equity or debt placement, etc.) Leveraged buyouts / Management buyouts Restructuring / Bankruptcy In these cases, the associate or analyst is expected to construct the financial model with guidance from the management team on assumptions and projections. Typically, the associate and analyst are responsible for “running the model”, including the ability to run base-case, upside, downside and alternate capital structure scenarios. For pitches and other cases where there is no access to the management team, projections from research reports (equity research reports, high yield research reports, credit rating agency reports, etc) can be used. 3 Introduction Tips for Setting Up the Financial Model Keep historic and projected income statement, balance sheet and cash flow on same worksheet Have Historic Ratios / Assumptions for Projections on the same worksheet but separate from the worksheet that has income statement, balance sheet and cash flow Formatting is very important in investment banking: same font and letter size...
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...of the companies with which they are affiliated. All of SBA's programs and services are extended to the public on a nondiscriminatory basis. ______________________________________________________________________________ TABLE OF CONTENTS INTRODUCTION 1 COVER SHEET 1 STATEMENT OF PURPOSE (MISSION STATEMENT) THE BUSINESS Legal Structure 2 Description of the Business 2 Products or Services 3 Location 3 Management 3 Personnel 3 Methods of Record Keeping 3 Insurance 4 Security 4 Summary 5 MARKETING Target Market 5 Competition 5 2 Methods of Distribution 5 Advertising 7 Pricing 7 Product Design 7 Timing of Market Entry Location 8 Industry Trends 8 7 FINANCIAL DOCUMENTS Summary of Financial Needs 8 Sources and Uses of Funds Statement Cash Flow Statement (Budget) 9 Three-year Income Projection 10 Break-even Analysis Graph 15 Actual Performance Statements 16 Balance Sheet 16 Summary 21 SUPPORTING DOCUMENTS Personal Resumes 22 Personal Financial Statement 22 Credit Reports 22 Copies of Leases 22 Letters of Reference 22 Contracts 22 Legal Documents 23 Miscellaneous Documents 23 9 PUTTING YOUR BUSINESS PLAN TOGETHER KEEPING YOUR BUSINESS PLAN CURRENT Making...
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...* How does a personal cash flow statement help you organize your finances? * What was the most interesting thing you learned about completing this worksheet? * Did this worksheet provide you with any ideas about how you may want to change your budget (how much you are spending, saving, or reducing your debt)? The personal cash flow statement is a categorized sheet that helps us identify the relationship between income and expenses. Calculating the income is an easy process, all you need to do, is add up the primary sources , like the monthly salary and the extra income like scholarship, gifts, but calculating the expenses is much harder because the total amount of the income, will be spent in so many different ways. This sheet will help you record the outflows over the same period of time, from the essential expenses to the unnecessary ones. Completing the sheet will make you feel organized and able to count all the expenses no matter how much money you spent on little purchases, and it make you go over the bank statements, the life and health insurances, the credit cards statement and bills, the ATM machine receipts, then get it all together and file it in order. This way, the financial situation will be organized, and you will be able to determine the net worth, how much you own and how much you owe, by the end of the month if you have money left over or if you are spending more money than you can afford . You will know by completing...
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...Bob’s Chocolate Chips and More, a bakery specializing in gourmet pizza and chocolate chip cookies, started business on October 1, 2011. The following transactions occurred during the month. 1. The company issued 6,000 shares of common stock at $15 per share. 2. The company acquired office equipment on October 1 for $30,000 cash. The equipment was used for administrative tasks. 3. The company purchased $15,000 of ingredients on account. 4. Rent is $500 a month. On October 1, the company paid rent for October, November, and December. 5. The company sold pizza and cookies for $35,000. The transaction was a credit sale. The pizza and cookies cost $9,000 to make. 6. The company paid salaries totaling $5,200. 7. The company collected $26,000 of the amount owed by customers. 8. The company paid $10,000 for ingredients previously purchased on account. 9. The company paid $800 for utilities on its corporate headquarters and $400 for advertising. 10. The company borrowed $12,000 from the bank for additional working capital requirements. The company repaid $3,000 by month-end. 11. The company paid $500 cash dividends to shareholders during October. 12. The company received an order from a customer for two luncheons. The sales price for the order was $20,000 ($10,000 for each luncheon). The customer paid $20,000 in advance for the order. Adjusting Entries Assume that the company has a monthly accounting cycle. Use the following information to construct the corresponding...
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...• How does a personal cash flow statement help you organize your finances? o It helps me organize my finances by being able to see where my money is going. By being able to see where my money is going I can better budget my money. I can better save my money so if anything shall happen know that I got the safety net of having extra money behind me. • What was the most interesting thing you learned about completing this worksheet? The most interesting thing that I learned when I completed this work sheet was that I was really able to see where my money was coming in and where it was going out too. There was many times I got myself saying “gosh I’m broke where in the world did my money go too?” I no longer will be able to say I don’t know where my money went to because I can look back onto this worksheet and see exactly where my money went too. I will know how to budget my money better so I know how I will be able to support my family better. • Did this worksheet provide you with any ideas about how you may want to change your budget (how much you are spending, saving, or reducing your debt)? o It gave me a better idea on how much some of the things I spend could really be. It did show me an idea or two where I could cut cost and where those other cost could be going...
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...makes cash management challenging for Ms. Ringer and has landed her in the predicament of requiring a loan to pay salaries. Aligning operating expenses to revenue, improving management of operating costs and decreasing the amount of cash in accounts receivable will improve her immediate cash flow crisis. For details see prior question. 2. To have access to the equity line of credit, the bank required the agency to maintain a cash balance of $20,000 at all times and the liquidation of the loan in its entirety for at least 1 month/year. The cash flow worksheet for the operations of MHHS reveal that the agency meets the requirements set forth by the bank. July is the loan free month due to Ms. Ringer liquidating the loan in June. This is as a result of decreased labor costs in the summer months because of staff vacations and part time salaries that are not paid. Her cash inflows exceed her expenses from January to June, which correlates with peak patient volumes. It appears she requires the line of credit to cover staff salaries and overhead during her quieter summer months. In addition the debt ratio has been steadily increasing since2008 while liquidity ratios have been decreasing putting MHHS at risk. When you review the amount of money in accounts receivable it appears she is borrowing money to pay salaries, as she is not collecting the money owed the agency, in a timely manner, and is cash strapped. The reconciliation of the information on the Cash Flow Worksheet with...
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...coordinating a business. Most management positions require years of experience and qualifications. It takes a very responsible and reliable person to be a manager. Managers should also have very good social and leadership skills. When you become a manager they look at you first when things go wrong. So you want to make sure you are handling your business the right way. You have to be capable of making difficult decisions for the business. You want the best for your business and want your business to have the best services so customer will leave satisfied. * List the reports in which you will run or request from the accountant. 1. Ledger 2. Balance Sheet 3. Income Sheet 4. Statement of Cash flows 5. Notes to the Financial Statements 6. Payroll worksheet * An explanation of what the report will tell you, what you will look for in each report, and why. Accounting is centered on the business aspect of an organization or department. Accountant’s responsibilities are to keep track of the accounts receivable and the accounts payable. They will be keeping up with the businesses financial events as they happen. The basic equation of accounting is Assets = Liabilities + Net Assets. The assets are anything useful or of value. The two types of assets are tangible and intangible. The liabilities are debts and obligations to outside creditors. The net assets are the amount left over after the liabilities are subtracted from assets. A Ledger is a book of accounts...
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...Header: Cash Flow Management Cash Flow Management Althea M Pullins BUS313 Professor Robert Filling 10/22/2011 A cash flow forecast can be a major problem for any business; it could be even more challenging for a startup company. A negative cash flow is a major problem for small businesses and can lead to bankruptcy. This unfortunate trend will continue due to a business owner’s neglecting the principle of cash flow management. Understanding and developing a cash flow forecast is a key to business success. Most entrepreneurs launch their business with insufficient cash to keep the company afloat. Cash management consists of forecasting, cash flow revenue, disbursement, revenues, and disbursement. In order to be effective in cash flow management an owner must control when a company will collect cash and pay it out. Understanding these steps is an important task because cash is the least productive asset that a company owns. A new enterprise must have enough cash to meet its obligations it a timely manner. Unfortunately many new business owners do not engage in effective cash flow management. Although cash flow management can be challenging it is not an insurmountable task. There are steps a new business owner can take. The first step is to understand business cash flow revenues by preparing cash forecasts that recognize estimated sales each month. The second step is to consider cash flow disbursement such as wages, rent, and supplier cash payment...
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...KEY NOTES: 1. Instructions are included throughout this document in red italics. Please delete all instructions before printing out your final plan. 2. This document includes the textual portion of your business plan. Many of you will also want to create your financial projections (created with the Microsoft Excel file we gave you) and integrate them into this document. Directions to do this are included throughout this document. To update this document at any time to reflect changes made to your Microsoft Excel file, simply save and close both files. When you reopen this file (after you create the links per the instructions in this document), you will see a prompt asking if you want to update this document with the data from the linked files. Simply select “Yes” to this question. [Company Logo] (if applicable) [Company Name] BUSINESS PLAN [Current Month], [Year] [Name] [Title] [Company Name] [Address 1] [Address 2] [City, State Zip] Tel: [ ] Fax: [ ] Email: [ ] CONFIDENTIAL No offering is made or intended by this document. Any offering of interests in [Company Name] will be made only in compliance with Federal and State securities laws. This document includes confidential and proprietary information of and regarding [Company Name]. This document is provided for informational purposes only. You may not use this document except for informational purposes, and you may not reproduce this document in whole or in part...
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...Clark Paints Capital Budgeting Decision Clark Paints should consider making cans in house by purchasing new machine and recruiting 3 new employees. Supporting statements and cash flows are given in separate spreadsheet. Make or Buy Worksheet shows that company would save $72,540 per year if made instead of purchasing. Company should accept the proposal to make the cans. Annual Cash Flows, Payback period, Annual Rate of Return, Net Present Value and Internal Rate of Return statements support the decision of making cans. Annual Cash Flows Cash flow is defined as revenue or expense that changes cash account over a given period. Annual cash flows prepared assuming company would make paint cans and how much company would save based on this decision. Expected Annual Cash flows are positive for making the paint cans instead of purchasing. Positive cash flow of $58,351 per year does support the decision of making cans in house. Payback Period Payback period refers to the period of time required for the return on new investment to cover the original investment. Payback period for making cans in factory is 3.4 years or 3 Years and 5 Months. As per the given assumptions new machinery will serve the company to make 5.5 Million cans and based on company expectations of making 1.1 Million cans per year, machinery will serve company 5 years. Before the end of life of machine company would be able to recover original investment made on machine. Annual Rate of Return Annual Rate of Return...
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...1. During the project initiation, a project charter is created. The project charter should include which of the following? • Project managers expenses • Analysis of budget • Selection of the senior project manager • Projects high-level deliverables 2. A project's budget should be based on a company’s • strategy and financial goals • profitability • financial goals and equity • debt load and equity 3. Earned value management is a technique used to integrate projects • resources • scope, schedule, and resources • schedule, costs, and benefits • costs and profits 4. Bill’s Billiards has total assets of $8 million and a total asset turnover of 2.9 times. If the return on assets is 11%, what is Bill's profit margin? • 11% • 4.10% • 2.50% • 3.79% 5. What are the acceptance criteria for NPV? • If the NPV is less that $0, accept the project. • If the NPV is greater than $0, accept the project. • If the IRR is equal to 0%, reject the project. • If the NPV is equal to the discounted payback, accept the project. University of Phoenix Final Exam Study Guide FIN 575 Final Exam 6. The risk response plan answers what question? • What can be done if risk occurs? What is the backup plan? • What are project costs? • There is no need to plan for risk seldom occurs in a project. • How risk is to be managed 7. For the most recent year, Cal’s Cats had sales of $380,000, cost of goods sold of $93,000, depreciation expense of $47,000, and additions to retained...
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...business builder 5 how to prepare a cash budget zions business resource center zions business resource center 2 how to prepare a cash budget At its most basic level, a budget is a plan for owners and managers to achieve their goals for the company during a specific time period. In this business builder you will learn the fundamental concepts of cash budgets and how to evaluate your budget on a month-to-month basis. What You Should Know Before Getting Started • The Purpose of a Cash Budget • Why Prepare a Cash Budget? 3 3 4 How to Create a Cash Budget • Time Period • Desired Cash Position • Estimated Sales and Expenses • Cash Flow Budget Worksheet 4 6 6 6 9 How to Analyze a Cash Budget Conclusion Checklist Resources 10 11 11 12 how to prepare a cash budget 3 what to expect This Business Builder will introduce you to the fundamental concepts of cash budgets and outline the steps necessary for preparing a cash budget for your business. It will also show you how to evaluate your budget on a month-to-month basis. This Business Builder assumes that an income statement and a balance sheet have been prepared for your business. Information from these financial statements are an integral part of creating a budget. Without that information, this Business Builder may not be as helpful as it could be. what you should know before getting started The Purpose of a Cash Budget At its most basic level, a budget is a plan. It is a plan for owners...
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...TEST BANK (Difficulty: E = Easy, M = Medium, and T = Tough) Multiple Choice: Problems (Note: MACRS accelerated depreciation rates should be given for many of these problems. These rates are provided in the text in Chapter 11, Table 11-2.) Easy: Investment outlay Answer: c Diff: E [i]. The Target Copy Company is contemplating the replacement of its old printing machine with a new model costing $60,000. The old machine, which originally cost $40,000, has 6 years of expected life remaining and a current book value of $30,000 versus a current market value of $24,000. Target's corporate tax rate is 40 percent. If Target sells the old machine at market value, what is the initial after-tax outlay for the new printing machine? a. -$22,180 b. -$30,000 c. -$33,600 d. -$36,000 e. -$40,000 Risk-adjusted discount rate Answer: c Diff: E [ii]. Dandy Product's overall weighted average required rate of return is 10 percent. Its yogurt division is riskier than average, its fresh produce division has average risk, and its institutional foods division has below-average risk. Dandy adjusts for both divisional and project risk by adding or subtracting 2 percentage points. Thus, the maximum adjustment is 4 percentage points. What is the risk-adjusted required rate of return for a low-risk project in the yogurt division? a. 6% b. 8% c. 10% d. 12% e. 14% Medium: [MACRS table required] New...
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