BUSN 70 Lecture Notes - Lecture 36: Inventory Turnover, Financial Statement, Asset Turnover
13 Mar 2021
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Document Summary
Pro forma financial statements are used to make decisions about future operations changes within a company. Include balance sheets, income statements, and cash flow statements. When a company is considering a change, composing pro forma financial statements will show. Whether the company needs financing to facilitate the proposed change. Explains how the company"s cash changed from the beginning of the accounting period to the end. The balance sheet shows the cash account in one point of time; most investors want a better picture of how cash flows into and out of the company. The statement of cash flows takes the cash balance from one year"s balance sheet and compares it with the next while providing detail about how the firm used the cash. The change in cash is detailed in these three categories. Cash from operating activities = calculated by combining the changes in the revenue, expense, current assets and current liability accounts.
