Pro Formas Results • Pro Forma Statements Cash Flow Use of Funds Income Statement Balance Sheet • Financial Ratios • Levelized Costs • Life Cycle Cost Analysis Net Present Value Internal Rate of Return BC Ratio Discounted Payback What Are Pro-Formas? • Pro formas are standard financial statements commonly used by investors for valuation, risk evaluation, and investment purposes. • They provide insight into how project will generate income a firm’s ability to repay debt, cash flow and cash available to provide equity investors a return Are they important? Examples of the importance placed on pro formas by financial ...
Forecasting and Pro Forma Analysis Timing of financial needs Amount of financial needs Flow of funds Check the covenants Pro forma Income Pro forma Balance Plug Figure Financing Options Statement Sheet Depreciation Change in Net Plant Capital Expenditures & Equipment Short-Term Debt Long-Term Debt Working Capital Sales Accounts External Forecast Financing Required Net Income Change in Retained Dividend Policy Earnings Steps in Financial Forecasting Forecast sales Project the assets needed to support sales Project internally generated funds Project outside funds needed Decide how to raise funds See effects of plan on ratios and stock price Sales Forecast Seasonal changes ...
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