Guide for Forecasting Financial Statements and Financial Valuation of a Business Plan (in Spanish)

Abstract

When creating a firm or when we intend to value an ongoing concern it is very important to have reliable and consistent financial statements in order to make the proper decisions not only for the starting of a new firm but for the following up and monitoring that firm or simply an ongoing concern. In this guide we show a very clear and simple step by step procedure to construct proforma financial statements. From these financial statements we will derive the cash flows necessary to calculate the market value and net present value (NPV) for the firm. We calculate the traditional break even points and what we call the dynamic break even points. We present some complexities and show a simple sensitivity analysis that includes the determination of critical variables and scenario analysis.

Note: The Downloadable document is in Spanish.

Keywords: Financial statements, forecasting, net present value (NPV), firm valuation, equity valuation, cost of capital, break even analysis, sensitivity analysis, cash flow valuation

JEL Classification: D61, G31, H43, M40, M46, D92, E22, E31, M41