Match the term with its definition.
-Statements that project a firm's financial performance and condition, including a firm's projected profits, assets and financing requirements, and cash flows
A)cash budget
B)line of credit
C)net working capital
D)percentage-of-sales technique
E)pro forma financial statements
F)spontaneous debt financing

Question

Quizplus · Accepted Answer

Pro forma financial statements are statements that project a firm's financial performance and condition, including a firm's projected profits, assets and financing requirements, and cash flows.

The other options are:
A) cash budget - a detailed projection of a company's anticipated cash inflows and outflows
B) line of credit - a type of loan that allows borrowers to draw money as needed, up to a pre-arranged limit
C) net working capital - the difference between a company's current assets (such as cash and inventory) and its current liabilities (such as accounts payable and taxes owed)
D) percentage-of-sales technique - a method of financial forecasting that uses past sales figures to project future sales and other financial metrics
F) spontaneous debt financing - a type of financing that arises as a result of a company's normal business activities, such as trade credit from suppliers.

Match the Term with Its Definition