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Financial Forecasting In-Class Examples

The document contains examples of financial forecasting techniques including simple linear regression to forecast sales revenue and pro forma income statements and balance sheets for 2015-2017. It shows historical sales data and calculates the slope and intercept to forecast future sales. The pro forma statements forecast revenue, expenses, profits, assets, liabilities and equity over three years.

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Robert Irons
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32 views3 pages

Financial Forecasting In-Class Examples

The document contains examples of financial forecasting techniques including simple linear regression to forecast sales revenue and pro forma income statements and balance sheets for 2015-2017. It shows historical sales data and calculates the slope and intercept to forecast future sales. The pro forma statements forecast revenue, expenses, profits, assets, liabilities and equity over three years.

Uploaded by

Robert Irons
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Financial Forecasting Examples

Forecasting Sales Revenue using Simple Regression

X Y
Obs Year Sales Forecast
0 2005 2,058
1 2006 2,534
2 2007 2,472
3 2008 2,850
4 2009 3,000
5 2010 3,128
6 2011 3,389
7 2012 3,264
8 2013 3,519
9 2014 3,606
10 2015
11 2016
12 2017
13 2018
14 2019

Slope Intercept

FIN 3010 Financial Forecasting Dr. Robert Irons


Pro Forma Income Statements 2015 - 2017

Pro Forma Income Statement ($M)


2014 % Sales 2015 % Sales 2016 % Sales 2017
Sales 3,606.0
COGS 2,163.6
Gross Income 1,442.4
Operating Expenses 980.8
Depreciation 100.0
EBIT 361.6
Interest 88.0
EBT 273.6
Taxes (40%) 109.4
Net Income 164.1

Preferred Dividends 4.0 4.0 4.0 4.0


NI Available to Common 160.1
Dividend per Share 1.15 1.25 1.25 1.25
Dividends to Common 57.5
Retained Earnings 102.6

# Shares Outstanding (M) 50 50 50 50

FIN 3010 Financial Forecasting Dr. Robert Irons


Pro Forma Balance Sheet 2015

2015 2015 Forecast


2014 % Sales Forecast 1st Pass AFN 2nd Pass
Cash & Equivalents 10.0
Accts Receivable 375.0
Inventories 615.0
Total Current Assets 1,000.0
Net Plant & Equipment 1,200.0
Total Assets 2,200.0

Accts Payable 60.0


Notes Payable 110.0
Accruals 140.0
Total Current Liabilities 310.0
LT Debt 754.0
Total Liabilities 1,064.0
Preferred Stock 40.0
Common Stock 230.0
Retained Earnings 866.0
Total Equity 1,136.0
Total Liabilities & Equity 2,200.0

Additional Funds Needed

New Capital Raised % $(Millions)


Notes Payable 20.0%
LT Debt 30.0%
Common Stock 50.0%
Total Capital Raised 100.0%

FIN 3010 Financial Forecasting Dr. Robert Irons

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