Which of the following should you consider most when preparing a financial forecast? Minimum cash requirements...
Which of the following should you consider most when preparing a financial forecast?
Minimum cash requirements
Historical cash flows
Industry averages
Capital structure
Homework Answers
answer is option B) Historical Cash flows
explanation
Financial forecast is an estimation. Historical data helps to analyze past financial performance. thus is helps to prepare financial forecast
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Which of the following should you consider most when preparing a
financial forecast?
Minimum cash requirements...
You are forecasting cash flows for a new investment. You forecast working capital needs as a percentage...
You are forecasting cash flows for a new investment. You forecast working capital needs as a percentage of revenues; should your fixed asset requirements also be as a percentage of revenues?
When preparing budgets, how can you contribute to financial bids and estimates? trainer's requirements as answer:...
When preparing budgets, how can you contribute to financial bids and estimates? trainer's requirements as answer: 1. Definition of financial bids 2. Connect how budgets can assist business in making financial bids.
13. Which of the following statements is correct? a. Any forecast of financial requirements involves determining...
13. Which of the following statements is correct? a. Any forecast of financial requirements involves determining how much money the firm will need and is obtained by adding together increases in assets and spontaneous liabilities and subtracting operating income. b. The projected balance sheet method of forecasting financial needs requires only a forecast of the firm's balance sheet. Although a forecasted income statement helps clarify the financing needs, it is not essential to the balance sheet method. c. Because dividends...
Which of the following statements is CORRECT? a. The first, and perhaps the most critical, step...
Which of the following statements is CORRECT? a. The first, and perhaps the most critical, step in forecasting financial requirements is to forecast future sales. b. The capital intensity ratio gives us an idea of the physical condition of the firm’s fixed assets. c. Forecasted financial statements, as discussed in the text, are used primarily as a part of the managerial compensation program, where management’s historical performance is evaluated. d. Perhaps the most important step when developing forecasted financial statements...
19. When preparing a statement of cash preparing a statement of cash loan (indirect methodl, which...
19. When preparing a statement of cash preparing a statement of cash loan (indirect methodl, which of the following is Hot an adjustm adjustment to reconcile net income to be cash vided by operating activities A) A change in income taxes payable B) A change in interest payable C) A change in dividends payable D) All of these are adjustments 20. When using the indirect method to prepare the operating section of a statement of cash llows, which of the...
When preparing a statement of cash flows on the indirect method, which of the following is...
When preparing a statement of cash flows on the indirect method, which of the following is correct? Select one: a. Proceeds from the sale of equipment should be added to net income in the operating activities section. b. A loss on the sale of land should be added to net income in the operating activities section. c. The declaration of a cash dividend should be a use of cash in the financing activities section. d. The issuance of a stock...
What are the two methods for preparing the Statement of Cash Flows? Which section of the...
What are the two methods for preparing the Statement of Cash Flows? Which section of the Statement of Cash Flows is different when preparing the financial statement using these two methods?
When the financial executive estimates the cash flows of a project for a capital budgeting analysis,...
When the financial executive estimates the cash flows of a project for a capital budgeting analysis, there is a degree of uncertainty surrounding the estimates. In this context, which of the following statements is true? a) Recognizing the uncertainty surrounding the estimates, the financial executive should use the most pessimistic figures. b) Since financial executives cannot influence certain external factors, they do not have to understand how these external factors can affect the estimates. c) One way the financial executive...
13. When using PP&E as the forecast driver for depreciation, which of the following is most...
13. When using PP&E as the forecast driver for depreciation, which of the following is most accurate? a) From both an ideal and a practical standpoint, the driver should be net PP&E. b) From both an ideal and a practical standpoint, the driver should be gross PP&E. c) Ideally, the driver should be net PP&E, but practically the driver should be gross PP&E. d) Ideally, the driver should be gross PP&E, but practically the driver should be net PP&E.
When preparing the operating section of the statement of cash flows using the direct method, which...
When preparing the operating section of the statement of cash flows using the direct method, which of the following statements is true? a. A decrease in accounts payable is subtracted from expenses. b. An increase in accounts receivable is subtracted from sales. c. Depreciation expense is added to cash flows. d. Gains on sales of long-term assets are subtracted from cash flows.
19. When preparing a statement of cash preparing a statement of cash loan (indirect methodl, which of the following is Hot an adjustm adjustment to reconcile net income to be cash vided by operating activities A) A change in income taxes payable B) A change in interest payable C) A change in dividends payable D) All of these are adjustments 20. When using the indirect method to prepare the operating section of a statement of cash llows, which of the...
13. When using PP&E as the forecast driver for depreciation, which of the following is most accurate? a) From both an ideal and a practical standpoint, the driver should be net PP&E. b) From both an ideal and a practical standpoint, the driver should be gross PP&E. c) Ideally, the driver should be net PP&E, but practically the driver should be gross PP&E. d) Ideally, the driver should be gross PP&E, but practically the driver should be net PP&E.
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