Financial Forecasting Objectives and Planning Documents
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Questions and Answers

What are the objectives of financial forecasting?

  • To ignore future opportunities
  • To decrease cost of responding to emergencies by anticipating future occurrences (correct)
  • To increase cost of responding to emergencies
  • To respond only to past opportunities

    • What are the three planning documents required in financial planning?

  • Cash Flow Statement, Balance Sheet, Income Statement
  • Budgeted Income Statement, Budgeted Balance Sheet, Cash Budget
  • Cash Budget, Pro Forma Balance Sheet, Pro Forma Income Statement (correct)
  • Expense Budget, Profit & Loss Statement, Cash Flow Statement

    • What does 'pro forma' refer to in financial planning documents?

  • Forecasting (correct)
  • Budgeting for the present
  • Analyzing current trends
  • Reviewing past data

    • Which method is commonly used for preparing pro forma statements?

    <p>Percentage of Sales</p> Signup and view all the answers

    What is the difference between Cash Budget and Percentage of Sales method in forecasting?

    <p>Cash Budget is simple, while Percentage of Sales is more complicated</p> Signup and view all the answers

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