Create a pro forma statement
Task:
- Decide upon an initiative you want to implement that would increase sales over the next five years, (for example, market another product, corporate expansion, and so on).
- Using the sample financial statements, create pro forma statements of five year projections that are clear, concise, and easy to read. Be sure to double check the calculations in your pro forma statements. Make assumptions that support each line item increase or decrease for your forecasted statements.
- Discuss and interpret the financials in relation to the initiative. Make recommendations on potential discretionary financing needs.
- Write a 450 word analysis of the company’s short term and long term financing needs and determine strategies for the company to manage working capital.
Ms Excel available for clear calculations.
Word Count
533
Format
APA
Answer Preview
According to Parrino, Kidwell, & Bates (2012), a pro forma financial statement captures forecasts on the basis of changes in business performance or expected future events.
These are different from normal financial statements that summarize past events in a business. Pro forma statements are important in both short-term and long-term planning and …