The First Step in Constructing a Financial Planning Model Is

question 80

Multiple Choice

The first step in constructing a financial planning model is to:

• A) determine the mix of securities that the company will need to issue.
• B) determine the amount of external financing that is needed.
• C) determine what additional fixed assets the company will need.
• D) project future cash flows from operations.

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Definitions:

General Ledger

A record of all financial transactions divided into accounts and usually compiled at the end of each month.

Balance Sheet

A financial statement that shows a firm’s assets, liabilities, and owner’s equity.

Income Statement

A financial statement that shows the revenue and expenses of a firm, allowing you to calculate the profit or loss produced in a specific period of time.

GAAP

Generally Accepted Accounting Principles; a common set of accounting principles, standards, and procedures that companies must follow when they compile their financial statements.