D076 Finance Skills for Managers - U9 (Part 1) Exam Questions & Answers 100% Correct!!

Purpose of Financial Forecasting - ANSWER-Help managers make decisions on future performance Helps decision makers understand how actions taken today can impact the firm's future performance Financial Forecasting - 3 Basic Steps - ANSWER-1. Project the firms sales revenues and expenses over the planning period 2. Estimate the levels of investment in current and fixed assets that are needed to support the projected sales forecast. 3. Determine the firm's financing needs throughout the planning period that are required to fund its assets. sales forcast - ANSWER-The Key ingredient in a firm's planning process It reflects: Past trend in sales that is expected to carry through into the new year The influence of any anticipated events that might materially affect that trend profit forecasting - ANSWER-is the projection of future earnings after all the projected costs are subtracted from the projected sales. Future earnings = Projected Costs - Projected Sales Balance Sheet Forecasting - ANSWER-is typically done in conjunction with projecting in come statement.