principal driver in creating a budgeted income statement
Order ID 53563633773 Type Essay Writer Level Masters Style APA Sources/References 4 Perfect Number of Pages to Order 5-10 Pages Description/Paper Instructions
principal driver in creating a budgeted income statement
The principal driver in creating a budgeted income statement sometimes referred to as a pro forma statement, is the sales forecast as discussed above. A projected increase in sales will require additional assets. Those assets (i.e., increase in accounts on the left-hand side of the balance sheet) must be paid for with corresponding increases in liabilities and equity (i.e., increases in accounts on the right-hand side of the balance sheet). The percent of sales method is most often used to forecast future asset, liability accounts, and equity (this assumes that the growth of all accounting elements follows the same trend line). For this process, the direct financing accounts on the right-hand side of the balance sheet (in particular, notes payable, long-term debt, preferred stock, and common equity are kept constant). The resulting difference between projected total assets and projected total liabilities and equity is the company’s future need for external funding. The growth rate in sales that results in the future need being zero is called the organizations’ sustainable growth rate.
For this assignment, you are the head of the budget committee for the chosen company from your previous assignments. Create a chart to convey the information in a chart or graphic format for each of the three stated assumptions below. The assumptions below will become part/support for the company strategic plan being developed. Incorporate each of your charts into a narrated PowerPoint presentation for the full strategic development committee.
This mid-term assignment has three related parts:
- Create pro forma statements for your chosen company for next year.
- Estimate the sustainable growth rate for your company.
- Perform a SWOT analysis on your company, using lessons you learned in Weeks 1 through 4 concerning microeconomics, macroeconomic, financial analysis, and financial forecasting.
Be sure your presentation includes the following details:
- Estimate the sales growth rate for the company for the next annual accounting period. Explain each step of your estimation process.
- Create proforma income statements and proforma balance sheets for your company for the next annual accounting period using the percent of sales method. Assume that all income accounts increase as a percent of sales, all asset accounts increase as a percent of sales, spontaneous liabilities increase as a percent of sales, and all financing accounts remain constant. The statements you create will be the initial round in order to determine the amount of working capital (cash, accounts receivable and inventory are the main categories of working capital) needed. Clearly identify what your statements indicate is the need for external short-term liabilities funds for the next annual accounting period (assume that current and quick ratios remain the same as prior years).
- Estimate the sustainable growth rate for your organization. Assume that all income accounts increase as a percent of sales, all asset accounts increase as a percent of sales, spontaneous liabilities increase as a percent of sales, and all financing accounts remain constant. Also, assume that the company will pay the exact same dollar amount in dividends in the next annual accounting period that it paid during the most recent period. Be sure to describe all steps in the process and clearly indicate the growth rate (as a percentage) that you find.
- Compare the sustainable growth rate you determined to the average annual growth rate in sales the company has had over the past 2 years. Is the average annual growth rate greater than or less than the sustainable growth rate? Assess this relationship.
- Conduct a SWOT analysis of your company (much information about each of the SWOT elements will be found in the text description at the beginning to annual report). Use one of the many templates (tables) for SWOT that you can find online. Your SWOT analysis should include at least three entries for each element in the table. The entries should be some combination of microeconomic (related to demand for the product, cost functions, competition, etc.), macroeconomic (related to projected growth in the overall economy, inflation, unemployment, etc.), financial past (based on your analysis in week three), and projected financial future (based on your analysis in Week 4).
- Write a one-paragraph description of each element in your SWOT table. Specifically indicate why you believe the chosen element is a Strength, Weakness, Opportunity or Threat.
Length: 12 slides with notes, including title and reference slides
Notes: 200 words per slide
References: Include a minimum of 3 scholarly resources.
Your assignment should demonstrate thoughtful consideration of the ideas and concepts that are presented in the course and provide new thoughts and insights relating directly to this topic. Your response should reflect graduate-level writing and APA standards.
RUBRIC
QUALITY OF RESPONSE NO RESPONSE POOR / UNSATISFACTORY SATISFACTORY GOOD EXCELLENT Content (worth a maximum of 50% of the total points) Zero points: Student failed to submit the final paper. 20 points out of 50: The essay illustrates poor understanding of the relevant material by failing to address or incorrectly addressing the relevant content; failing to identify or inaccurately explaining/defining key concepts/ideas; ignoring or incorrectly explaining key points/claims and the reasoning behind them; and/or incorrectly or inappropriately using terminology; and elements of the response are lacking. 30 points out of 50: The essay illustrates a rudimentary understanding of the relevant material by mentioning but not full explaining the relevant content; identifying some of the key concepts/ideas though failing to fully or accurately explain many of them; using terminology, though sometimes inaccurately or inappropriately; and/or incorporating some key claims/points but failing to explain the reasoning behind them or doing so inaccurately. Elements of the required response may also be lacking. 40 points out of 50: The essay illustrates solid understanding of the relevant material by correctly addressing most of the relevant content; identifying and explaining most of the key concepts/ideas; using correct terminology; explaining the reasoning behind most of the key points/claims; and/or where necessary or useful, substantiating some points with accurate examples. The answer is complete. 50 points: The essay illustrates exemplary understanding of the relevant material by thoroughly and correctly addressing the relevant content; identifying and explaining all of the key concepts/ideas; using correct terminology explaining the reasoning behind key points/claims and substantiating, as necessary/useful, points with several accurate and illuminating examples. No aspects of the required answer are missing. Use of Sources (worth a maximum of 20% of the total points). Zero points: Student failed to include citations and/or references. Or the student failed to submit a final paper. 5 out 20 points: Sources are seldom cited to support statements and/or format of citations are not recognizable as APA 6th Edition format. There are major errors in the formation of the references and citations. And/or there is a major reliance on highly questionable. The Student fails to provide an adequate synthesis of research collected for the paper. 10 out 20 points: References to scholarly sources are occasionally given; many statements seem unsubstantiated. Frequent errors in APA 6th Edition format, leaving the reader confused about the source of the information. There are significant errors of the formation in the references and citations. And/or there is a significant use of highly questionable sources. 15 out 20 points: Credible Scholarly sources are used effectively support claims and are, for the most part, clear and fairly represented. APA 6th Edition is used with only a few minor errors. There are minor errors in reference and/or citations. And/or there is some use of questionable sources. 20 points: Credible scholarly sources are used to give compelling evidence to support claims and are clearly and fairly represented. APA 6th Edition format is used accurately and consistently. The student uses above the maximum required references in the development of the assignment. Grammar (worth maximum of 20% of total points) Zero points: Student failed to submit the final paper. 5 points out of 20: The paper does not communicate ideas/points clearly due to inappropriate use of terminology and vague language; thoughts and sentences are disjointed or incomprehensible; organization lacking; and/or numerous grammatical, spelling/punctuation errors 10 points out 20: The paper is often unclear and difficult to follow due to some inappropriate terminology and/or vague language; ideas may be fragmented, wandering and/or repetitive; poor organization; and/or some grammatical, spelling, punctuation errors 15 points out of 20: The paper is mostly clear as a result of appropriate use of terminology and minimal vagueness; no tangents and no repetition; fairly good organization; almost perfect grammar, spelling, punctuation, and word usage. 20 points: The paper is clear, concise, and a pleasure to read as a result of appropriate and precise use of terminology; total coherence of thoughts and presentation and logical organization; and the essay is error free. Structure of the Paper (worth 10% of total points) Zero points: Student failed to submit the final paper. 3 points out of 10: Student needs to develop better formatting skills. The paper omits significant structural elements required for and APA 6th edition paper. Formatting of the paper has major flaws. The paper does not conform to APA 6th edition requirements whatsoever. 5 points out of 10: Appearance of final paper demonstrates the student’s limited ability to format the paper. There are significant errors in formatting and/or the total omission of major components of an APA 6th edition paper. They can include the omission of the cover page, abstract, and page numbers. Additionally the page has major formatting issues with spacing or paragraph formation. Font size might not conform to size requirements. The student also significantly writes too large or too short of and paper 7 points out of 10: Research paper presents an above-average use of formatting skills. The paper has slight errors within the paper. This can include small errors or omissions with the cover page, abstract, page number, and headers. There could be also slight formatting issues with the document spacing or the font Additionally the paper might slightly exceed or undershoot the specific number of required written pages for the assignment. 10 points: Student provides a high-caliber, formatted paper. This includes an APA 6th edition cover page, abstract, page number, headers and is double spaced in 12’ Times Roman Font. Additionally, the paper conforms to the specific number of required written pages and neither goes over or under the specified length of the paper. GET THIS PROJECT NOW BY CLICKING ON THIS LINK TO PLACE THE ORDER
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