9780273713654 Pp07 1
Chapter 7
Fund Analysis, CashFlow Analysis, and
Financial Planning
7.1
Van Horne and Wachowicz, Fundamentals of Financial Management, 13th edition. © Pearson Education Limited 2009. Created by Gregory Kuhlemeyer.
After Studying Chapter 7, you should be able to:
1.
2.
3.
4.
5.
6.
7.
7.2
Explain the difference between the flow of funds (sources and uses of funds) statement and the statement of cash flows – and understand the benefits of using each.
Define "funds" and identify sources and uses of funds.
Create a sources and uses of funds statement, make adjustments, and analyze the final results.
Describe the purpose and content of the statement of cash flows as well as implications that can be drawn from it.
Prepare a cash budget from forecasts of sales, receipts, and disbursements – and know why such a budget should be flexible. Develop forecasted balance sheets and income statements.
Understand the importance of using probabilistic information in forecasting financial statements and evaluating a firm's condition. Van Horne and Wachowicz, Fundamentals of Financial Management, 13th edition. © Pearson Education Limited 2009. Created by Gregory Kuhlemeyer.
Fund Analysis, Cash-Flow
Analysis, and Financial Planning
•
Flow of Funds (Sources and Uses)
Statement
•
Accounting Statement of Cash Flows
•
Cash-Flow Forecasting
•
Range of Cash-Flow Estimates
•
Forecasting Financial Statements
7.3
Van Horne and Wachowicz, Fundamentals of Financial Management, 13th edition. © Pearson Education Limited 2009. Created by Gregory Kuhlemeyer.
Flow of Funds Statement
A summary of a firm’s changes in financial position from one period to another; it is also called a sources and uses of funds statement or a statement of changes in financial position.
Has been replaced by the cash flow statement (1989) in US audited annual reports. 7.4
Van Horne and Wachowicz, Fundamentals of Financial Management, 13th edition. © Pearson Education Limited 2009. Created by Gregory
Fund Analysis, CashFlow Analysis, and
Financial Planning
7.1
Van Horne and Wachowicz, Fundamentals of Financial Management, 13th edition. © Pearson Education Limited 2009. Created by Gregory Kuhlemeyer.
After Studying Chapter 7, you should be able to:
1.
2.
3.
4.
5.
6.
7.
7.2
Explain the difference between the flow of funds (sources and uses of funds) statement and the statement of cash flows – and understand the benefits of using each.
Define "funds" and identify sources and uses of funds.
Create a sources and uses of funds statement, make adjustments, and analyze the final results.
Describe the purpose and content of the statement of cash flows as well as implications that can be drawn from it.
Prepare a cash budget from forecasts of sales, receipts, and disbursements – and know why such a budget should be flexible. Develop forecasted balance sheets and income statements.
Understand the importance of using probabilistic information in forecasting financial statements and evaluating a firm's condition. Van Horne and Wachowicz, Fundamentals of Financial Management, 13th edition. © Pearson Education Limited 2009. Created by Gregory Kuhlemeyer.
Fund Analysis, Cash-Flow
Analysis, and Financial Planning
•
Flow of Funds (Sources and Uses)
Statement
•
Accounting Statement of Cash Flows
•
Cash-Flow Forecasting
•
Range of Cash-Flow Estimates
•
Forecasting Financial Statements
7.3
Van Horne and Wachowicz, Fundamentals of Financial Management, 13th edition. © Pearson Education Limited 2009. Created by Gregory Kuhlemeyer.
Flow of Funds Statement
A summary of a firm’s changes in financial position from one period to another; it is also called a sources and uses of funds statement or a statement of changes in financial position.
Has been replaced by the cash flow statement (1989) in US audited annual reports. 7.4
Van Horne and Wachowicz, Fundamentals of Financial Management, 13th edition. © Pearson Education Limited 2009. Created by Gregory