The first step in performing projected financial analysis is to
A) prepare the projected balance sheet.
B) take an inventory of goods.
C) estimate increases in debt.
D) prepare the projected income statement.
E) calculate the projected net income.

Question

Quizplus · Accepted Answer

The first step in performing projected financial analysis is to prepare the projected income statement. This statement will help in determining the projected revenues, expenses, and net income for the future period, which is essential to estimate the financial health of a company. Once the projected income statement is prepared, other financial statements like the projected balance sheet and projected statement of cash flows can be developed accordingly.

The First Step in Performing Projected Financial Analysis Is to