1.

For which company can trend analysis be most useful?

• A banking company that recently changed its accounting practices, but not its business model

• A retail company that recently changed its accounting practices and its business model

• A mining company that recently changed its business model, but not its accounting practices

• A software company whose business model and accounting practices have remained stable over time

2.

What must be forecasted first in order to prepare the pro forma income statement?

• Sales

• Expenses

• Cost of goods sold

• Net income