D076 WGU Finance Skills for Managers Module 9 exams passed

Balance Sheet Forecasting - Using sales growth and the profit forecast to construct a pro forma balance sheet to understand the future implications of the sources and uses of finances Discretionary accounts - Accounts that do not vary proportionally with sales but are decided upon by management Discretionary Financing Needed (DFN) - The additional financing needed given a firm's expectations for future growth How can a firm grow its fixed assets if it is expecting growth but has reached capacity with its fixed assets? - Invest a substantial amount of money at one time to increase capacity If a company expects sales to grow by 10% next year, which account might also increase by 10%? - Cost of goods sold Payout Ratio - The percent of net income distributed to the shareholders Pro Forma Statements - A financial statement that projects an estimate for future periods "as if" sales grew as predicted Profit forecasting - the projection of future earnings after all the projected costs are subtracted from the projected sales Retention Ratio - The percent of net income retained in the firm; also called the plowback ratio Spontaneous accounts - Accounts that vary proportionally with sales