Learn how budgeting and planning ahead benefit small businesses that are forecasting the need for future loans.
- Most of us have practiced, hopefully,…in budgeting our time.…If you don't plan things ahead and budget your time,…you're at risk of not getting the most…important things done.…In addition, if you don't have a plan,…you can't tell whether you are ahead of schedule…or woefully behind schedule to the extent…that you won't be able to get everything done.…This same idea of planning ahead applies…to small businesses who are forecasting the need…for future bank loans.…Consider the following forecasted information…for Derrald Company, a hypothetical small business.…
Derrald prepared these forecasts in November…looking ahead to the first four months of the upcoming year.…The budgeted cash collections in January, 100,000.…February, 80,000, March, 75,000,…and in April, a whopping 146,000…forecasted cash collections.…Budgeted cash payments, January, $97,000…for operating expenses.…February, 85,000 for operating expenses,…17,000 for dividends to owners,…and 25,000 to buy new equipment.…
March, 82,000 for operating expenses…
In this course, join accounting professors Jim and Kay Stice as they help you discover how to leverage the power of numbers to approach businesses problems and make everyday decisions. They explore the power of ratios and percentages, how to monitor and evaluate your budget, how to forecast the timing and amount of a business loan, and much more.
- The power of ratios and percentages
- Growth rates, rule of 72, and extrapolation
- Financial ratios to determine unpaid inventory
- How to convert to percentages
- Variance and the concept of risk
- Numerical planning and everyday decisions
- Creating, monitoring, and evaluating your budget
- Forecasting the timing and amount of a business loan
- The power of compound interest
- Loan payments and interest rates