PART 5: SPECIAL TOPICS
ONLINE STUDY TOOLS
Visit http://login.cengagebrain.com and use
the access code that comes with this book for
12 months’ access to the resources and study
tools for this chapter. The CourseMate website
contains:
Smart concepts – step-by-step explanations of
concepts
» See a demonstration of long-term
financing and short-term fluctuations
in asset growth and the sustainable
growth model.
Smart solutions – step-by-step explanations of
problems» See the solution to Problem 16-2.
» See the solution to Problem 16-7.
Smart videos
» Jackie Sturm, Vice President of Finance
Intel Corp.
» John Eck, President of Broadcast and
Network Operations, NBC
» Daniel Carter, Vice President of
Finance, BevMo!
» Beth Acton, Vice President and
Treasurer of Ford Motor Co. (former)
Interactive quizzes
Audio
Flashcards and more.mini caseFINANCIAL PLANNING
Bar BQ, a regional restaurant chain, has decided to expand
nationwide, and consequently expects rapid growth. As
Bar BQ’s new CFO, you are in charge of planning for this
growth. Before starting to plan, you decide to refresh your
knowledge of financial planning by answering the following
questions.ASSIGNMENT
1 One method of estimating the effects of growth is
the sustainable growth model. What assumptions are
inherent with this model?
2 Another method of estimating growth is for the
company’s managers to forecast pro forma financialstatements. How are the sales forecasts that are
necessary to create pro forma statements derived?
3 Why might the estimates for external funds required
(EFR) differ between using the percentage-of-sales
method to estimate pro forma statements and using
the shorthand approach in Equation 16.2 (see page
581)?
4 If sales volume fluctuates in the short-term around the
long-term estimated trend, what alternative financing
strategies might be considered?5 Discuss how managers might monitor a company’s cash
inflows and cash outflows on a day-to-day basis.