Discuss each pro forma statement in the financial plan in terms of time frame. Identify important considerations in the construction of these pro forma statements.
What will be an ideal response?
The key pro forma statements (which should be projected out for three to five years) include annual statements for the balance sheet, income statement, and statements of cash flow. Cash budgets are monthly for the first year and quarterly for years two and three and possibly up to five years.
Supporting financial projections should be backed up with well-substantiated assumptions and an explanation of computations. Statements of cash flows are especially important because a business can be profitable while failing to produce positive cash flows. These statements should identify sources of cash, intended investments, and the purpose of any investments.
You might also like to view...
Meanings for words do not reside in their symbols; rather, they reside where?
A. on the page B. in the minds of those who use them C. in the inflection D. only in the dictionary
List the threats posed by the five forces identified by Michael Porter that determine the intrinsic long-run attractiveness of a market or market segment
What will be an ideal response?
The logical solution to the problem of finding a global definition for diversity that can be relevant in different cultural and national contexts is to define diversity by process and _____________.
a. Category b. Consequences c. Relevancy d. Impact
Symmetric information is defined as the situation in which _______.
A. investors and managers have identical information about the firm's prospects B. employees and managers have identical information about the firm's prospects C. investors and creditors have identical information about the firm's prospects D. managers have different (better) information about their firm's prospects than outside investors E. employees have different (better) information about their firm's prospects than managers