COMPANIES PRO-FORMA FINANCIAL PAPER

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The response addresses the queries posted in 1241 words with references.

//Before writing about the pro forma financial paper for the two Companies Citigroup and Bank of America; we have to understand the meaning of pro forma and the major financial projections to be included. We will discuss the set of pro forma financials for both the Companies and the assumptions to be included for preparing their cash budget.//

Companies Pro-Forma Financial Paper

Pro forma is arrived from a Latin word which means "as a matter of form". It is designed to calculate and to show the future projections for financials (income statement and balance sheet) for the coming year or years. The following will show Pro-forma income statement and balance sheet using the percentage sales method for the next fiscal year for both Bank of America and Citigroup. Inc. Finance 599.xls

Additional Assumptions and Additional Information needed for the preparation of Cash Budget:

Cash budget is probably the most important tool in the process of cash management. It is a device to help a firm to plan and control the use of cash. The various purposes of cash budgets are: (1) to coordinate the timing of cash needs, (2) it pinpoints the period when there is likely to be excess cash, (3)it enables a firm which has sufficient cash to take advantage of cash discounts, (4) it helps to arrange the needed cash on the most favorable terms and helps to prevent the accumulation of excess cash.

Additional Information Required:

Ø Need to know the percentage of credit and cash sales.

Ø Need to know the percentage of credit and cash purchases.

Ø The time lag taken for all the expenses as wages, salaries, factory expenses, administrative expenses etc.

Assumptions:

Ø All the debts are paid on time.

Ø There are no bad and doubtful debtors and all the debtors pay their amount within the time allowed by the company.

Ø The time period taken ...