Describe the importance of the pro forma financial statements?
What will be an ideal response?
A good idea is not a guarantee for a profitable one. Will allow the entrepreneur to determine the monetary value of the idea. Will allow investors to see their return on investment. Numbers should be realistic.
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Determining the cash flows from operating activities generally requires analyzing each item on the income statement as well as the current asset (except cash) and current liability accounts
a. True b. False Indicate whether the statement is true or false
Gaulle Company began the year with a balance of $6,000 in Accounts Receivable and ended the year with $9,000 in the account. Revenues for the period amounted to $38,000 . Under the direct method, Gaulle will report cash collected from customers of:
a. $44,000 b. $35,000 c. $41,000 d. $47,000
Which of the following statements is TRUE of the debt to equity ratio?
A) The higher the debt to equity ratio, the lower the company's financial risk. B) The higher the debt to equity ratio, the greater the company's financial risk. C) If the debt to equity ratio is greater than 1, the company is financing more assets with equity than with debt. D) If the debt to equity ratio is less than 1, the company is financing more assets with debt than with equity.
Total manufacturing costs are equal to
a. Direct Materials + Direct Labor + Selling Costs. b. Direct Materials + Direct Labor + Overhead. c. Direct Labor + Overhead + Selling Costs + Administrative Costs. d. Product Costs + Period Costs.