Question
1. Chapters 3 and 4 discuss Financial Analysis and Forecasting. Financial analysis and forecasting are based on assumptions and estimates. Comparing the income of two
1. Chapters 3 and 4 discuss Financial Analysis and Forecasting. Financial analysis and forecasting are based on assumptions and estimates. Comparing the income of two companies may include different company assumptions in reporting their financial information. Therefore, their income may be different even though they have the same products in equal volume. Discuss the various financial/accounting assumptions that could explain the difference in income for two companies income with the same products and equal volume. Please explain and document your answers. Financial forecasting is also based on assumptions. Companies with cyclical cycles may assume level production schedules in their financial forecast. Discuss the advantages and disadvantages of making this assumption. Please explain and document your answers.
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