Financial Forecasting

There are two parts to this assignment.

Part 1:
In this assignment, you will conduct a financial forecast for a healthcare organization’s external funding. After you conduct that forecast, you will discuss the learning concepts from the module.

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ABC Company is a small manufacturer of ultrasound equipment. The Year 1 financial statements for the firm are shown below:

Balance Sheet as of December 31, Year 1 (thousands of SAR)

Cash

90,000

 

Receivables

 

180,000

 

Inventories

 

360,000

 

Total current assets

 

630,000

 

Net fixed assets

 

720,000

 

Total assets

 

1,350,000

 

Accounts payable

 

180,000

 

Notes payable

 

78,000

 

Accruals

 

90,000

 

Total current liabilities

 

348,000

 

Common stock

 

900,000

 

Retained earnings

 

102,000

 

Total liabilities & equity

 

1,350,000

 

Income Statement for Year 1 (thousands of SAR)

Sales

1,800,000

 

Operating costs

 

1,639,860

 

Earnings before interest and taxes

 

160,140

 

Interest

 

10,140

 

Earnings before taxes

 

150,000

 

Taxes (20%)

 

30,000

 

Net income

 

120,000

 

Dividends (60%)

 

72,000

 

Addition to retained earnings

 

48,000

 

Suppose that in Year 2, sales only increase by 8 percent over Year 1 sales. Construct the pro forma financial statements using the constant growth method. Assume the firm operated at full capacity in Year 1. What will be the external funding requirement?

Part 2:
How does trend analysis help in the forecasting revenue, expenses and profit on the Profit and Loss Statement for an organization? Explain whether forecasting difficulties depend on the type of healthcare organization, such as a hospital or an outpatient clinic. Additionally, explain what impact a growing population within the Kingdom of Saudi Arabia will have on the ability to forecast utilization of assets (on the Balance Sheet) effectively.

Express the financial concepts of this course such as revenue payment methods, financial risk, debt, equity, capital acquisition, financial forecasting, and the revenue cycle.

Your paper should meet the following structural requirements:

The paper should be 6 pages in length, not including the cover sheet and reference page.
You must show all your calculations for credit. Your calculations for this assignment must be submitted as an Excel file, identified as Appendix A, and included as part of the Word document submission.
Format the paper according to APA writing standards.
Provide support for your statements with in-text citations from a minimum of two scholarly articles.

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