Paper details:
Adelman, P. J., & Marks, A. M. Entrepreneurial Finance. 6th ed (2014). Upper Saddle River, NJ: Prentice Hall.
ISBN-13: 978-0-13-314051-4
Answer all of the following questions/problems and submit them to your mentor in a Word document.
You should use a financial calculator and Excel to solve the problems.
Remember: You must export your table(s) from Excel to Word before submitting your work.
Consult the Course Calendar for due dates.
Discuss why forecasting is important to an organization including a brief discussion of the six steps that an organization should follow when developing its forecasting model.
What role does MAD play in evaluating a forecasting model?
List and describe at least two time series models giving an example of the type of business that might find each of the models you discuss beneficial.
Describe how you would develop a pro forma income statement (Table 6-7 in your textbook).
What role does the pro forma balance sheet play in financial forecasting?
Why is it important to have a budget to use as both a monitoring and control tool?
Moving Average Forecast—Using the data in the table below, calculate a three-month moving average forecast for month 12.
Table. Actual Sales Data
Time Period
Actual Sales ($000)
1
445
2
478
3
525
4
660
5
570
6
600
7
632
8
648
9
690
10
725
11
750
12
Regression Forecast. Using the data in the table for questions #7 calculate the four items below. You may do this on your calculator or in Excel, however, please be sure to indicate the primary formula that you would use for each calculation. If you make your calculations in Excel be sure to export your work into Word before submitting your work to your mentor.
What is the slope?
What is the intercept?
Write the regression equation.
Calculate a regression forecast for month 25.
Using the following balance sheet, create a pro forma sheet using the percentage of sales method. Assume income next year is $50,000.
Total Sales
Current Year
$275,000
Percentage of Sales (%)
Sales Next Year
$350,000
Assets
Current Assets
Cash
$ 5,694
Accounts Receivable
19,662
Inventory
3,381
Total Current Assets
$28,737
Fixed Assets
Furniture & Fixtures
5,595
Transportation Equipment
25,456
Total Fixed Assets
$31,051
Total Assets
$59,788
Liabilities and Owner’s Equity
Current Liabilities
Notes Payable
$15,456
Accrued Taxes Payable
3,598
Total Current Liabilities
$19,054
Long Term Debt
18,654
Total Liabilities
$37,708
Owner’s Equity
22,080
Total Liabilities and Owner’s Equity
$59,788
Using the results from your pro forma balance sheet in question 9 answer the following:
How much did the owners take out of the business?

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