Purchase Solution

Importance of pro forma financial statements

Not what you're looking for?

Ask Custom Question

Why is it important for firms to use pro forma income statements, balance sheets, cash flows, and ratios? Also, discuss the areas that are effected the most by decreases and increases in all statements.

Purchase this Solution

Solution Summary

The importance of pro forma financial statements is outlined in a few paragraphs.

Solution Preview

Pro forma income statements, balance sheets, and cash flows are useful for forecasting the amount of external financing that will be required in the future. These evaluate the impact that changes in the operating plan have on the value of firm and helps set appropriate targets for compensation plans.

Financial ratios are helpful in understanding the financial statements, assessing financial health of the business ...

Purchase this Solution


Free BrainMass Quizzes
Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.