Learn how to forecast liabilities and equity.
- If we need $792 in assets, … then our total liabilities and equities … have to add up to $792. … Where is that $792 going to come from? … If sales go up by 20%, … our purchases should also go up by about 20%. … And so our accounts payable balance … should also naturally increase by 20% … from $100 to $120. … And we already computed that our retained earnings … will be $98 at the end of next year. … We already assumed that our loans payable … are going to be $300. … So the only thing left is … how much is paid-in capital going to be? … $120 plus $300 plus something plus $98 … is going to be $792. … That something, the plug number here is $274. … That's what my forecasted paid-in capital is for next year. … Now we can stop and say, "Wait a second. … "I made some simple assumptions. … "I assumed that my sales are going to go up by 20%. … "I assumed that I could do that with no new increase … "in property, plant and equipment. … "I assumed that I could do that with no new loans. … "And I assumed that I'm going to keep …
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
Views
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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 liabilities and equity