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Author Question: Shawn Jones was reading the business plan of New Venture Fitness Drinks, and noticed that prior to ... (Read 187 times)

student77

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on: Jul 6, 2018
Shawn Jones was reading the business plan of New Venture Fitness Drinks, and noticed that prior to its financial forecasts, New Venture Fitness Drinks placed an explanation of the sources of the numbers for the forecast and the assumptions used to
 
  generate them. This explanation is called a(n) ________.
  A) forecast sheet
  B) forecast hypothesis
  C) estimate statement
  D) assumption sheet
  E) hypothesis sheet

Question 2

What is ratio analysis? Why is it important?
 
  What will be an ideal response?


kmb352

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Reply #1 on: Jul 6, 2018
Answer to Question 1

D

Answer to Question 2

The most practical way to interpret or make sense of a firm's historical and pro forma financial statements is through ratio analysis. The ratios described in the textbook are divided into profitability ratios, liquidity ratios, and overall financially stability ratios. These ratios provide a means of interpreting the historical and pro forma financial ratios for a firm.


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