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The owners would like you to explain the background to preparing the projected financial statements and...

The owners would like you to explain the background to preparing the projected financial statements and business ratios. Specifically, they would like answers to the following questions:

  • What is the purpose of preparing the financial statements?
  • What principles are involved in preparing the different financial statements?
  • Why is depreciation not included in the Statement of Cash Flow?
  • What is the difference between profit and cash?
  • Explain the importance of ratios and comparing them to industry averages
  • What other benchmarking tools can you use other than ratios?

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Expert Solution

jeff jeffy answered 2 days ago
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