Understanding of the fundamentals of financial forecasting

 

• Prepare cash budgets and pro forma financial statements to consolidate understanding of the fundamentals of financial forecasting and the relationship between the two basic forecasting techniques – cash budgeting and pro forma financial statement analysis
• Assess whether the lender should issue the loan to a profitable firm that experiences a bottleneck problem in its production
• Practice critical evaluation of assumptions underlying financial forecasts
• Provide a preliminary analysis on topics like share repurchases and dividend payouts

Questions:
1. Why can’t a profitable company like Jackson repay its loan on time? What major company developments between August 2012 and May 2013 contribute to this situation? Prepare a sources and uses of funds statement for August 2012 through May 2013.
2. Why does the company need a new loan? How urgent is the need for additional borrowing?
3. Prepare monthly cash budget and pro forma income statements and balance sheets for the last four months of the fiscal year. Do the cash budgets and pro forma financial statements yield the same results? Why or why not?
4. Based on your forecasts and analysis of Jackson’s credit, is the company able to repay its loan at the end of the fiscal year? What are the risks associated with the proposed loan?
5. Critically evaluate the assumptions on which your forecasts are based and perform sensitivity analysis on the fiscal year-end cash balance when sales forecasts vary from expectations.
6. Should the bank extend the maturity of the current loan and approve the additional loan? What terms and conditions should the bank impose to reduce the risks of the loan to the bank?
7. Why did the company repurchase a substantial fraction of its outstanding common stocks? What’s the impact of the repurchase on Jackson’s financial condition?
8. Critically assess the company’s proposed dividend payout in September 2013. Should the bank agree with the payout? What seems to be an appropriate amount?

Sample Solution

also, Singh 2006). Thus this implies that the brand accomplices the purchaser, makes a character inside the shopper that can be relied upon and frames some kind of profound security which is been constructed and accordingly makes marked networks (Schmitt and Rogers 2008). Barkus and others (2009) likewise in accordance with Fournier’s (1998) declarations conceptualized brand insight to incorporate sensations, sentiments, perceptions and attitudinal reactions steered by brand related improvements which structure part of the personality and plan of a brand, its bundling, correspondence and environmental factors that empower to make quality relationship and close to home connection between the buyer and the brand (such profound connection is viewed as affection or enthusiasm, self-association, reliance, closeness and obligation to the brand). All the more thus, brand experience impacts long haul and momentary outcomes, this can be noted in a client’s observational worth that reaches from style, perkiness, greatness of administration, and the client’s profit from venture (Keng, Tran, and Le Thi, 2013). Percy and Hansen (2000) think that the encounters the buyer has with the brand, either as far as genuine use or a horse comprehension of it, leads to profound relationship in memory. Consequently, the more a purchaser “encounters” the brand while seeing or potentially hearing it, the more the brand is enrolled in the memory of the customer which prompts close to home connections. This amounts to the quintessence of an advertiser in building an unbending brand that has the reasonable sort of encounters to the client with its items and administrations combined with the exercises of promoting that empowers the imbibition of helpful contemplations, sentiments, convictions, discernments, pictures and feelings with the brand that outcome in the boost of the shoppers fulfillment (Keller, 2003 promotion Anderson and Sullivan 1993).

Contextual investigation An examination of Tesco
UK retail is on the speed path particularly in this time of innovation and the serious nature on how client drew in with brand and items. Tesco has been select to show how the association oversee in-store client experience. Tesco is one of the main general store brand in the UK and presently positioned as the best in-store staple grocery store and Tesco works around 3961 stores across the UK (tesco.com, 2020). During the 1970s and 1980s, there w3as this mission among clients to look for results of value and decision, the known Tesco “heap it high and sell it modest” structure was arrangement and this without a doubt was not exactly fruitful as their results plunged horrendously. The fundamental reason for such sad execution was because of a to some degree odd picture of Tesco and its items painted in the personalities of clients; taking into account the modest costs, its stores were deficiently overseen and its things were of horrendously ludicrous and poor (Albrecht Enders and Tawfik Jelassi, 2009).

Moreover, to discover uniqueness in client experience through a plenty of channels, new frameworks and innovation as in regards to deals and circulation; this set Tesco across a scope of stores and different market sections (Master MacLaurin, 1996). In this manner, just to get together with the increas

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