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    Financial Forecasting Shan Report

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    JMerrill Calda
    Financial forecasting allows firms to anticipate future events like external funding needs. It involves projecting financial statements including income, financial position, and additional required funds. The process considers target capital structure, current ratio effects of borrowing, market conditions, and debt restrictions. Financial management aims to maximize shareholder wealth through profit while providing social benefits to communities.

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    Financial Forecasting Shan Report

    Uploaded by

    JMerrill Calda
    35 views6 pages
    Financial forecasting allows firms to anticipate future events like external funding needs. It involves projecting financial statements including income, financial position, and additional required funds. The process considers target capital structure, current ratio effects of borrowing, market conditions, and debt restrictions. Financial management aims to maximize shareholder wealth through profit while providing social benefits to communities.

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    Financial forecasting allows firms to anticipate future events like external funding needs. It involves projecting financial statements including income, financial position, and additional required funds. The process considers target capital structure, current ratio effects of borrowing, market conditions, and debt restrictions. Financial management aims to maximize shareholder wealth through profit while providing social benefits to communities.

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    35 views6 pages

    Financial Forecasting Shan Report

    Uploaded by

    JMerrill Calda
    Financial forecasting allows firms to anticipate future events like external funding needs. It involves projecting financial statements including income, financial position, and additional required funds. The process considers target capital structure, current ratio effects of borrowing, market conditions, and debt restrictions. Financial management aims to maximize shareholder wealth through profit while providing social benefits to communities.

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    of 6

    CHAPTER -14

    Financial forecasting
    Role of financial Management

    • Financial Management
    - is concerned with the proper
    specification of the financial goals of the firm as
    well as the measurement of performance relative
    to the achievement of these objectives.
    Objectives of the firm

    1. Financial goals
    -which refer to shareholder wealth maximization
    vis-à-vis through profit maximization.

    2. Social and community goals


    -which pertain to providing benefits to its
    community through pollution control, equitable hiring
    practices and fair trade and pricing standards.
    Nature of financial forecasting

    • Financial forecasting allows the firm to anticipate events before they


    occur, particularly the need for raising funds externally. Well-run
    companies generally base their operating plans on a set of projected
    financial statements.
    Steps in Financial forecasting

    • Projected financial Statement Method

    -STEP 1. Forecast the statement of comprehensive income.


    -STEP 2. Forecast the statement of financial position.
    -STEP 3. Raising the additional funds needed.
    4 Factors: 1. Target capital structure
    2. Effect of short-term borrowing on its current ratio
    3. Conditions in the debt and equity market
    4. Restrictions imposed by existing debt agreements.
    -STEP 4. Consider financing feedback.
    “ Work for a cause, not for
    Applause

    ”
    Kamsahamnida!!!......

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