Chapter 8 Financial Planning and Control. Financial Planning and Control. Financial Planning: The projection of sales, income, and assets based on alternative production and marketing strategies, as well as the determination of the resources needed to achieve these projections
Financial Planning and Control
Unilate Textiles Company
Unilate has decided that any additional funds needed to support future operations will be raised mainly by issuing new common stock.
The effects on the income statement and balance sheet of actions taken to finance forecasted increases in assets
80Suppose in 2013 fixed assets had been operated at only 80% of capacity:
Other Considerations in Forecasting: Excess Capacity
Changes in variable cost ratio affect the addition to retained earnings which affects the amount of AFN.