Learn how to forecast an income statement.
- [Instructor] So, let's start with the … Forecasted Income statement. … Sales are forecasted to go up by 20%. … Sales in year one were $1,000. … If they are going to go up by 20%, … they' re going to go up to $1,200. … That's our starting point. … Now, I should stop here for just a moment. … Please realize that the most difficult part of this … whole exercise that we are going to do … is right here, getting the sales forecast. … How much are our sales going to go up? … What's going to happen in our market next year? … What are our competitors going to do? … What's going to happen in the overall economy? … All these complex factors need to come into this estimate … of the sales increase. … If my sales go up by 20%, … what should happen to my cost of goods sold? … Just naturally, I don't need to make … any wild assumptions here. … If I sell 20% more stuff, then I am going … to probably have to buy 20% more stuff from my suppliers. … My cost of goods sold should go up by 20%. … So, last year, my cost of goods sold was $700. …
Released
3/5/2019- Determine the parts of an income statement.
- Review the different parts of a statement of cash flows.
- Analyze common-size financial statements.
- Define ratio analysis.
- Explain current ratio.
- Distinguish the steps in the operating cycle.
- Examine how to determine the day’s sales in inventory.
- Explore how to calculate the average collection period.
- Identify the fundamentals of analyzing cash flows.
- Explore business valuation while examining the intersection of accounting and finance.
Skill Level Beginner
Duration
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Introduction
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1. Quick Review of Financial Statements
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Review of the balance sheet4m 49s
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2. Analyzing Financial Statements
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3. Ratio Analysis: DuPont Framework
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Ratio analysis3m 27s
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Return on equity2m 26s
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DuPont framework4m 52s
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Current ratio4m 12s
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Debt ratio4m 10s
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Price-earnings ratio3m 39s
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4. Ratio Analysis: The Operating Cycle
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The operating cycle3m 46s
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Days sales in inventory3m 49s
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Average collection period3m 31s
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Days purchases in payable3m 28s
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Real world: Procter & Gamble3m 21s
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5. The Statement of Cash Flows
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Analyzing cash flows2m 22s
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What does it tells us?4m 21s
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Cash flow patterns2m 32s
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One method of analysis4m 37s
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Two methods for presentation4m 14s
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6. Forecasting Financial Statements
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The initial assumptions1m 48s
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Forecasted retained earnings2m 25s
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Forecasted assets2m 42s
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7. Intro to Business Valuation
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8. Valuation: Using Multiples
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The Microsoft IPO3m 46s
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Earnings multiples3m 32s
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Equity multiples3m 38s
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Sales multiples4m 23s
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9. Valuation: Free Cash Flows
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Buying the Hong Kong car?2m 26s
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Risk and interest rates3m 44s
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Forecasting cash flows4m 22s
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10. Valuation: Comparing Models
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Brief McDonald's history2m 53s
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McDonald's: The numbers2m 41s
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Conclusion
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Next steps3m 4s
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Video: Forecasted income statement