FinancialPlanningandForecasting(英文版)

1、4 - 1Copyright 2001 by Harcourt, Inc.All rights reserved.CHAPTER 4Financial Planning and ForecastingnForecasting salesnProjecting the assets needed to support salesnProjecting internally generated fundsnProjecting outside funds needednDeciding how to raise fundsnSeeing the effects of a plan on ratio

2、s4 - 2Copyright 2001 by Harcourt, Inc.All rights reserved.2000 Balance Sheet(Millions of $)Cash & sec.$ 20 Accts. pay. & accruals$ 100Accounts rec. 240 Notes payable 100Inventories 240Total CL$ 200Total CA$ 500 L-T debt100Common stock500Net fixedRetained assets 500 earnings 200Total assets $

3、1,000Total claims $1,0004 - 3Copyright 2001 by Harcourt, Inc.All rights reserved.2000 Income Statement(Millions of $)Sales$2,000.00Less: Var. costs (60%)1,200.00Fixed costs 700.00EBIT$ 100.00Interest 16.00EBT$ 84.00Taxes (40%) 33.60Net income$ 50.40Dividends (30%)$15.12Addn to RE$35.284 - 4Copyright

4、 2001 by Harcourt, Inc.All rights reserved. NWC Industry ConditionBEP10.00%20.00%PoorProfit margin2.52%4.00% ”ROE7.20%15.60% ”DSO43.20 days 32.00 days ”Inv. turnover8.33x11.00 x ”F. A. turnover4.00 x5.00 x ”T. A. turnover2.00 x2.50 x ”Debt/assets30.00%36.00%GoodTIE6.25x9.40 xPoorCurrent ratio2.50 x3

5、.00 x ”Payout ratio30.00%30.00%O. K.Key Ratios4 - 5Copyright 2001 by Harcourt, Inc.All rights reserved.Key AssumptionsnOperating at full capacity in 2000.nEach type of asset grows proportionally with sales.nPayables and accruals grow proportionally with sales.n2000 profit margin (2.52%) and payout (

6、30%) will be maintained.nSales are expected to increase by $500 million. (%D DS = 25%)4 - 6Copyright 2001 by Harcourt, Inc.All rights reserved.AssetsSales01,0002,0001,2502,500A*/S0 = 1,000/2,000 = 0.5 = 1,250/2,500.D D Assets=(A*/S0) D D Sales= 0.5(500)=250.Assets = 0.5 sales4 - 7Copyright 2001 by H

7、arcourt, Inc.All rights reserved.Assets must increase by $250 million. What is the AFN, based on the AFN equation?AFN= (A*/S0)D DS (L*/S0)D DS M(S1)(RR)= ($1,000/$2,000)($500) ($100/$2,000)($500) 0.0252($2,500)(0.7)= $180.9 million.4 - 8Copyright 2001 by Harcourt, Inc.All rights reserved.Assumptions

8、 about How AFN Will Be RaisednThe payout ratio will remain at 30 percent (d = 30%; RR = 70%).nNo new common stock will be issued.nAny external funds needed will be raised as debt, 50% notes payable and 50% L-T debt.4 - 9Copyright 2001 by Harcourt, Inc.All rights reserved.Sales$2,0001.25$2,500Less:VC

9、1,200 0.601,500FC 7000.35 875 EBIT$ 100$ 125Interest 16 16 EBT$ 84$ 109Taxes (40%) 34 44Net income$ 50$ 65Div. (30%)$15$19Addn to RE$35$46ForecastBasis2001Forecast2001 Forecasted Income Statement20004 - 10Copyright 2001 by Harcourt, Inc.All rights reserved.At full capacity, so all assets must increa

10、se in proportion to sales.20001st PassForecastBasisCash$ 200.01$ 25Accts. rec.2400.12300Inventories 2400.12 300 Total CA$ 500$ 625Net FA 5000.25 625 Total assets $1,000$1,2502001 Balance Sheet (Assets)4 - 11Copyright 2001 by Harcourt, Inc.All rights reserved.* From income statement.20002001ForecastB

11、asisAP/accruals$ 1000.05$ 125Notes payable 100 100 Total CL$ 200$ 225L-T debt 100100Common stk.500500Ret.earnings 200+46* 246 Total claims $1,000$1,0712001 Balance Sheet (Claims)4 - 12Copyright 2001 by Harcourt, Inc.All rights reserved.What is the additional financing needed (AFN)?NWC must have the

12、assets to make forecasted sales. The balance sheet must balance. So, we must raise $179 externally.nRequired increase in assets= $ 250nSpontaneous increase in liab. = $ 25nIncrease in retained earnings= $ 46nTotal AFN= $ 1794 - 13Copyright 2001 by Harcourt, Inc.All rights reserved.How will the AFN b

13、e financed?Additional notes payable = 0.5($179) = $89.50 Additional L-T debt = 0.5($179) = $89.50But this financing will add to interest expense, which will lower NI and retained earnings. We will generally ignore financing feedbacks.4 - 14Copyright 2001 by Harcourt, Inc.All rights reserved.2001 2nd

14、 Pass Balance Sheet (Assets)No change in asset requirements.1st Pass2nd PassAFNCash$ 25$ 25Accts. rec.300300Inventories 300 300 Total CA$ 625$ 625Net FA 625 625 Total assets $1,250$1,2504 - 15Copyright 2001 by Harcourt, Inc.All rights reserved.2001 2nd Pass Balance Sheet (Claims)1st Pass2nd PassAFNA

15、P/accruals$ 125$ 125Notes payable 100+89.5 190 Total CL $ 225$ 315L-T debt100+89.5189Common stk.500500Ret. earnings 246 246 Total claims $1,069$1,2504 - 16Copyright 2001 by Harcourt, Inc.All rights reserved.Equation AFN = $181 vs. $179. Why different?nEquation method assumes a constant profit margin

16、, a constant dividend payout, and a constant capital structure.nFinancial statement method is more flexible. More important, it allows different items to grow at different rates.4 - 17Copyright 2001 by Harcourt, Inc.All rights reserved.Ratios 20002001(E) IndustryBEP10.00% 10.00% 20.00% PoorProfit ma

17、rgin2.52%2.62%4.00%”ROE7.20%8.77% 15.60% ”DSO (days)43.2043.2032.00 ”Inv. turnover8.33x8.33x11.00 x ”F. A. turnover4.00 x4.00 x5.00 x ”T. A. turnover2.00 x2.00 x2.50 x ”D/A ratio30.00% 40.34% 36.00% ”TIE6.25x7.81x9.4x ”Current ratio2.50 x1.99x3.00 x ”Payout ratio30.00% 30.00% 30.00% O. K.4 - 18Copyr

18、ight 2001 by Harcourt, Inc.All rights reserved.What was the net investment in operating capital?Oper. cap.2001= NOWC + Net FA= $625 $125 + $625= $1,125.Oper. cap.2000= $900.= $1,125 $900 = $225.Net inv. in oper. cap.4 - 19Copyright 2001 by Harcourt, Inc.All rights reserved.How much free cash flow wa

19、sgenerated in 2001?FCF= NOPAT Net inv. in oper. cap.= EBIT (1 T) Net inv. in oper. cap.= $125 (0.6) $225= $75 $225= -$150.4 - 20Copyright 2001 by Harcourt, Inc.All rights reserved.Suppose in 2000 fixed assets had been operated at only 75% of capacity.With the existing fixed assets, sales could be $2

20、,667. Since sales are forecasted at only $2,500, no new fixed assets are needed.667, 2$75.0000, 2$capacity of %sales ActualSalesCapacity 4 - 21Copyright 2001 by Harcourt, Inc.All rights reserved.How would the excess capacity situation affect the 2001 AFN?nThe projected increase in fixed assets was $

21、125, the AFN would decrease by $125.nSince no new fixed assets will be needed, AFN will fall by $125, to $179 $125 = $54.4 - 22Copyright 2001 by Harcourt, Inc.All rights reserved.Q.If sales went up to $3,000, not $2,500, what would the F.A. requirement be?A.Target ratio = FA/Capacity sales= 500/2,66

22、7 = 18.75%.Have enough F.A. for sales up to$2,667, but need F.A. for another$333 of sales:D DFA = 0.1875(333) = $62.4.4 - 23Copyright 2001 by Harcourt, Inc.All rights reserved.How would excess capacity affect the forecasted ratios?1. Sales wouldnt change but assets would be lower, so turnovers would

23、 be better.2. Less new debt, hence lower interest, so higher profits, EPS, ROE (when financing feedbacks considered).3. Debt ratio, TIE would improve.4 - 24Copyright 2001 by Harcourt, Inc.All rights reserved.2001 Forecasted Ratios: S01 = $2,500% of 2000 Capacity 100% 75% IndustryBEP10.00%11.11%20.00

24、%Profit margin2.62%2.62%4.00%ROE8.77%8.77%15.60%DSO (days)43.2043.2032.00Inv. turnover8.33x8.33x11.00 xF. A. turnover4.00 x5.00 x5.00 xT. A. turnover2.00 x2.22x2.50 xD/A ratio40.34%33.71%36.00%TIE7.81x7.81x9.40 xCurrent ratio1.99x2.48x3.00 x4 - 25Copyright 2001 by Harcourt, Inc.All rights reserved.H

25、ow is NWC performing with regard to its receivables and inventories?nDSO is higher than the industry average, and inventory turnover is lower than the industry average.nImprovements here would lower current assets, reduce capital requirements, and further improve profitability and other ratios.4 - 2

26、6Copyright 2001 by Harcourt, Inc.All rights reserved.AssetsSales01,1001,0002,0002,500Declining A/S Ratio1,000/2,000 = 0.5; 1,100/2,500 = 0.44. Declining ratio shows economies of scale. Going from S = 0 to S = $2,000 requires $1,000 of assets. Next $500 of sales requires only $100 of assets.BaseStock

27、4 - 27Copyright 2001 by Harcourt, Inc.All rights reserved.AssetsSales1,0002,000500A/S changes if assets are lumpy. Generally will have excess capacity, but eventually a small D DS leads to a large D DA.5001,0001,5004 - 28Copyright 2001 by Harcourt, Inc.All rights reserved.Regression Analysis for Ass

28、et ForecastingnGet historical data on a good company, then fit a regression line to see how much a given sales increase will require in way of asset increase.4 - 29Copyright 2001 by Harcourt, Inc.All rights reserved.Example of RegressionConstant ratio overestimates inventory required to go from S1 = 2,000 to S2 = 2,500. For a Well-Managed Co. YearSalesInv. 1998$1,280$118 19991,600138 20002,