Submitted by: Submitted by mayloni
Views: 11
Words: 1000
Pages: 4
Category: Business and Industry
Date Submitted: 07/06/2015 10:56 AM
Long Term Financial Needs
FIN/486
June 29, 2015
Mary Orcutt
Long Term Financial Needs
Introduction
Huffman Trucking is a national transportation company with the mission to be a profitable, growing, and adaptive company in an intensively logistical services business environment and the vision to be a model company to stockholders, employees, customers, and all stakeholders. To reach these mission and vision statements, Huffman may overcome increased competition and economic slowdown by initiating a new strategic initiative. Through the new strategic initiative, Huffman will provide consulting services, generate revenues, and become a JIT warehouse and delivery source (University of Phoenix, 2013). With the pro forma balance sheets and statements, the financial report will contain the External Funds Needed (EFN) calculation, the ratio calculations, and variable and fixed items on the income statement and balance sheet.
Pro Forma Balance Sheet
Pro forma balance sheets are used to predict the future state of Huffman Trucking’s health when implementing the new strategic initiative. When creating the pro forma balance sheet, the calculations begin with the current balance sheet to adjust the amounts based on predictions and reasoning. The current balance sheet is a financial statement that shows a reflection on the company’s health based on assets, liabilities, and equities. Assets are things that the company owns of value and categorized by current assets, long term assets, and other assets. Liabilities represent amounts the company owes and categorized by current liabilities and long term liabilities. Equity is the amount that is calculated by subtracting the liabilities from the assets. With the new strategic initiative, assumptions are determined to adjust the balances of accounts (VanBaren, 2015).
EFN Calculation
By using the pro forma statement, the company can quickly determine the value of EFN to balance Huffman Trucking’s financial status...