Choose a side regarding pro-forma financial statements and make an argument for why you selected that...

Choose a side regarding pro-forma financial statements and make an argument for why you selected that side.

Expert Solution

I have selected the side that is “for” pro-forma financial statements.

My arguments for selecting that side: Pro-forma financial statements are essential for showing how future assets will be affected by business transactions. Pro-forma financial statements are based on hypothetical budgeting and the statements enables the managers and business owners to get a clearer view of their business decisions will change the financial balances in the short-term. Also as pro-forma financial statements consider both the best case as well as the worst case scenario the managers and owners can take a knowledgeable approach to decision making. Pro-forma financial statements tend to be very useful when a person wants to determine the impact of a business decision. For instance suppose that a shoes manufacturing company is looking to expand and is considering three possible financing options. The managers can prepare pro-forma financial statements for each of the three scenarios and then select the optimal financing option.

ekkarill92 answered 2 years ago

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