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10 Cards in this Set
- Front
- Back
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EFN
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A does not equal L
so EFN needed A > L = EFN > 0 = deficit A < L = EFN < 0 = surplu |
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EFN
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figure out what CA assets, NFA are as a % of sales (L side is n/a)
then take that same % and x by new sales amount to get new CA, NFA. |
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EFN
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= change in sales / last years sales = %
take the change in sales (change needed in new assets) - new addition to RE to get EFN |
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TOTAL NEW DEBT
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original owners equity + EFN (new borrowing)
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DEBT EQUITY RATIO
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total debt / owners equity
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% SALES APPROACH
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USE PRO FORMA INCOME STATEMENT
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PRO FORMA STATEMEN
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sales (projected)
- cogs (% of sales) = taxable income - taxes = new net income |
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WHAT VARIES W/ % CHANGE IN SALES?
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all on A side
accounts payable on L side those that dont change, just write in the original amount |
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NEW ADDITION TO RE
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new NI X plowback ratio
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PLANNING MODEL
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external sales forecast
pro forma statement sales - costs (% sales) net income A requirement financial requirements the plug (EFN) surplus/shortfall economic assumptions |
