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Operating Plan
Provide detailed implementation guidance based on the corporate strategy to meet corporate objectives. Function responsibility, timeline, sales and profit targets Usually good for 5 years
Sales Forecasts
A forecast of a firms unit and dollar sales for some future period. Generally based on recent sales trends + forecasts of the economic prospects for the nation, region, industry, etc. An objective decision. Many factors have to be considered in doing sales forecast. Extremely critical and important as it is a crucial determinant of how much inventory and fixed assets to invest in, which entail considerable amount of money.
2009 100,000
2014 8% 180,338
Forecast Horizon
100,000
Additional Information: 8% Bonds Payable, at par 565 million 5% Notes Payable 60 million 1% Preferred Stock 5 million # of Common Stock Outstanding 50 million Dividend per share is expected to increase by 10%
2009 Net Plant and Equipment 800 million 2010 Net Plant and Equipment 960 million Annual Depreciation Rate 10% Dividend per share in 2009 is 10 Sales is expected to increase by 20%
Assets are needed and liabilities are incurred to support company operations
Plus 83,430
TOTAL
100%
104,570.00
Plus 10,457
Plus 41,828
Plus 52,285
Plus 303,430
50% 100%
80,182.00 160,364.00
SUPPLEMENTARY INFORMATION:
Return on Assets NI to common/Total Assets Return on EBIT(1-T)/Total Operating invested capital Capital
Pay suppliers in 60 days, rather than 30 days? Decrease AFN: Trade creditors supply more capital (i.e., L*/S0 increases).
Source: Brigham s Official PPT