A Developing Pro Forma Financial Statements and Cash Flow Forecasts

question 22

Essay

a. Developing pro forma financial statements and cash flow forecasts depends heavily upon sales forecasts. Imagine you are a financial analyst working for a major stockbroker, and you are trying to develop a one-year sales forecast for a major national department store. List five pieces of information you want to obtain to aid you in your forecast, explaining why this will aid you in your forecast.b. Now you have made your best prediction of next year's sales, you want to estimate next year's cost of goods sold. Pick two pieces of information you definitely want to obtain in order to help you with this task, being sure to explain why they will be helpful.

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Definitions:

Capital

Financial assets or the financial value of assets, such as cash and securities; also, factories, machinery, and equipment used to produce goods or services.

Production Outcomes

Production outcomes refer to the results of the production process, quantified in terms of quantity, quality, and efficiency of the goods or services produced.

Stocks

Stocks represent shares of ownership in a company, giving shareholders a claim on part of the company's assets and earnings.

Flows

In economics, movements of goods, services, capital, or money among different sectors or regions within an economy.