FimMan Chapter 4 Terms

This plan would require making relatively optimistic assumptions about the company products and state of economy.

• Best Case

• Worst Case

• A Case

• Best Option

A firm’s total assets divided by its sales, or the amount of assets needed to generate $1 in sales.

• Capital Intensity ratio

• Capital Detensity ratio

• Capital Sales ratio

• Capital Asset ratio

The amount of additional financing needed to balance the liabilities and equity to assets

• External Financing Needed

• Internal Financing Needed

• Gimme my Money

• Extra Financing Needed

• The designated source of external financing needed to deal with any shortfall (or surplus) in financing and thereby bring the balance sheet to balance.

• Financial “plug” variable

• Financial “bug” variable

• Financial “fix” variable

• Financial “pls help” variable

• The maximum growth rate a firm can achieve without external financing of any kind.

• Internal Growth Rate

• External Growth Rate

• Not Internal Growth Rate

• International Growth Rate

• This plan would require making the most likely assumptions about the company products and state of economy.

• Normal Case Plan

• Best Case Plan

• Worst Case Plan

• Extra Case Plan

A financial planning method in which accounts are varied depending on a firm’s predicted sales level.

• Percentage of Sales Approach

• External Sales Approch

• Ratio of Sales Approach

• The Sales Approach

The long-range time period on which the financial planning process focuses (usually the next two to five years).

• Planning Horizon

• Planning Horizontal

• Planning Sealine

• Planning Vertical

The maximum growth rate a firm can achieve without external equity financing while maintaining a constant debt-equity ratio.

• Sustainable growth rate

• Un-Sustainable growth rate

• Sustainable decline rate

• Sustainable growth ratio

• This plan would require making relatively pessimistic assumptions about the company products and state of economy.

• Worst Case

• Best Case

• Normal Case

• Awful Case