A financial model creates a set of projections about the future of a business in terms of the businesses' income statement, balance sheet, and cash flow statement. Each statement is linked in such a way that changing assumptions about one factor can result in changes only in the cash flow statement.

Question

Quizplus · Accepted Answer

Changing assumptions about one factor can result in changes in all three statements, not just the cash flow statement.

A Financial Model Creates a Set of Projections About the Future