The asset and liability side of a pro forma balance sheet projection will not balance,in general,unless we make assumptions about how ________ and ________ will grow with sales.
A)dividends,equity
B)coupons,debt
C)debt,equity
D)dividends,preferred stock
E)accounts receivable,accounts payable

Question

Quizplus · Accepted Answer

Debt and equity are crucial for balancing the asset and liability sides of a pro forma balance sheet projection because they represent the main sources of financing for a company's operations and growth. Assumptions about how these will grow with sales are necessary to ensure that the projected financial statements are balanced and reflect a realistic scenario of the company's financial position.

The Asset and Liability Side of a Pro Forma Balance