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Author Question: What is a pro forma statement? Describe the two major types of pro forma statements, and explain the ... (Read 107 times)

@Brianna17

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on: Jul 14, 2018
What is a pro forma statement? Describe the two major types of pro forma statements, and explain the role they play in financial planning.

Question 2

A tender offer is an offer to purchase stock from existing stockholders.
 
 Indicate whether the statement is true or false


chjcharjto14

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Reply #1 on: Jul 14, 2018
Answer to Question 1

A key element of financial planning is the development of financial statements called pro forma statements. Instead of describing the results of a firm's past operations, they are projected financial statements; in other words, they present a forecast of what will happen in the future. The two major pro forma statements are the budgeted income statement and the budgeted balance sheet.
Budgeted income statement: It uses information from the sales budget and various cost budgets to develop a forecast of net income for the planning period.

Budgeted balance sheet: It projects the types and amounts of assets a firm will need to carry out its future plans and shows the amount of additional financing (liabilities and owners' equity) the firm must obtain to acquire those assets.

Answer to Question 2

True


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