The composition of the liability and equity sections of a pro forma statement depend most heavily on a ﬁrm's:

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The liability and equity sections of a pro forma statement are primarily affected by a firm's financing and dividend policies. These policies determine how the firm will raise capital and distribute profits or dividends to shareholders, both of which directly impact the liability and equity sections of the statement. Factors such as net working capital policies and liquidity levels may also influence these sections, but they are not the primary drivers. Capital budgeting and working capital policies are more likely to affect the asset side of the statement. The level of capacity utilization may also have an impact on the statement, but it is less directly related to the liability and equity sections.

The Composition of the Liability and Equity Sections of a Pro