There are a variety of ways to produce pro formas, but they usually rely on two primary inputs. One of these primary inputs is ________.
A) the projected sales for the current year
B) the projected sales for the past year
C) the prior year's financial statements
D) this year's financial statements

Question

Quizplus · Accepted Answer

Pro formas rely on historical financial data, so the prior year's financial statements are typically used as one of the primary inputs. Option A is not necessarily accurate, as pro formas can project beyond the current year. Option B does not make sense, as projecting sales for the past year is not useful information. Option D may be used to inform the pro forma, but it is not one of the primary inputs.

There Are a Variety of Ways to Produce Pro Formas