This case is designed to illustrate the importance of financial forecasting when planning a corporation's future operations.

In particular, it allows you the opportunity to go through the mechanics of financial forecasting using both the AFN formula and the percentage of sales method.

All dollar amounts are in millions. The model uses an explicit iterative procedure to take account of financial feedbacks in ${?}^{+-}$ financing the AFN.

Sensitivity analysis is conducted by changing input variables and observing changes in the output variables: data tables can be used to facilitate this operation.

INPUT DATA:

Sales growth rate

$1996$ Div per share

$1995$ shares $($in M$)$

Stock price

D$/$A used for AFN

Tax rate

ST interest rate

IT interest rate

Capacity utiliz.

KEY OUTPUT :

$($In Millions of Dollars$)$

$-=$ MMS CAPACITY Questions&Answers $+$

Workbook Statistics

Table $3.$ Historical and Projected Financial statements $($in Millions$)$

BALANCE SHEETS :

Net fixed assets Total assets

$42$

$43$

$44$ Accounts payable

$45$ Notes payable

$46$ Accr. wages & taxes

$47$

$48$

Curr. liabilities

$\backslash$table$[[27\mathrm{.}36,32\mathrm{.}48\%,32\mathrm{.}83,32\mathrm{.}83,32\mathrm{.}83,32\mathrm{.}83],[$$$42\mathrm{.}12,$N$.$A$.,$$$51\mathrm{.}89,$$$51\mathrm{.}89,$$$51\mathrm{.}89,$$$51\mathrm{.}89$