Contents
Forecasting
Funds
Investment
Investment Appraisal
Public Sector Capital Budgeting
Financial Statements
Ratios
Interpretation and limitations of ration
analysis
Identify alternatives
Identify the criteria
Collect data
Evaluate data
Select the best alternative (The decision)
Review the decision and feedback
Forecasting
Financial decisions are future oriented
Mostly based on future cash flows
Needs substantial amount of predictions
about the future
Forecasting types
Based on the period
Long term
Medium term
Short term
Fixed costs
Variable costs
Absorption rates
Level of activity
Cash flows
Constant
Linear trend
Cyclical
Seasonal
Random
Seasonal / Cyclical trend
Regression
Forecasting Techniques
Expert opinion
Delphi Method
Simple average
Moving average
Trend analysis (Page 1.18)
Regression analysis (Page 1.21 / 1.22)
Trend adjusted regression
Forecasting accuracy
MAD
Sensitivity How sensible the forecasted
value or method to the fluctuation of data
Ex / 3 month moving avg. vs. average and
accuracy
Manufacturing
cost paid
Trading
Account
Cash receipts
from customers
/ Cash paid to
suppliers
P&L
Account
P&L
appropriatio
n Account
Balance
Sheet
Account
Other cash
receipts
and
payments
Tax paid /
Dividend
s paid
Cash and Bank
balance
Capital
Income
CFS
Capital
Expenditure
Sales
Variable cost
Gross profit
Fixed costs
Depreciation
EBIT
Taxes (t%)
Net Income
Jan
Feb