Term
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Definition
Forecasting of a financial statement using a sales forecast and a percentage sales method to show we are funding the growth of the firm by identifying the “Plug”.
-projects future year of operations
-need to estimates the quantities of unit sales, selling price per unit , variable cost per unit and total fixed cost. Need to know what the total investment cost is including any investment in net working capital.
EFN - Eternal Financing Needed
AFN – Additional Financing Needed – Internal |
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Term
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Definition
| the maximum growth rate a firm can achieve without external financing of any kind |
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Term
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Definition
| The maximum growth rate a firm can achieve without external equity financing while maintaining a constant debt-equity ratio. |
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Term
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Definition
| Funding needed for the growth of the firm |
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Term
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Definition
| the amount of cash paid out to shareholders divided by Net Income .. |
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Term
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Definition
| the addition to retained earnings divided by Net Income. Also called plowback ratio. |
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