| aggregation | Process in corporate financial planning whereby the smaller investment proposals of each of the firm's operational units are added up and in effect treated as a big picture.
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| asset requirements | A common element of a financial plan that describes projected capital spending and the proposed uses of net working capital.
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| dividend payout ratio | Amount of cash paid to shareholders expressed as a percentage of earnings per share.
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| economic assumptions | Economic environment in which the firm expects to reside over the life of the financial plan.
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| financial requirements | In the financial plan, financing arrangements that are necessary to meet the overall corporate objective.
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| percentage of sales approach | A financial planning protocol that specifies balance sheet and income statement items as a proportion of sales.
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| plug | A variable that handles financial slack in the financial plan.
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| pro forma statements | Projected income statements, balance sheets, and sources and uses statements for future years.
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| retention ratio (plowback ratio) | Retained earnings divided by net income. Also called the plowback ratio.
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| sales forecast | A key input to the firm's financial planning process. External sales forecasts are based on historical experience, statistical analysis, and consideration of various macroeconomic factors; internal sales forecasts are obtained from internal sources.
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| sustainable growth rate | The only growth rate possible with preset values for four variables: profit margin, payout ratio, debt-equity ratio, and asset utilization ratio, if the firm issues no new equity.
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