Activity 1:

1. Give the four financial statements. Give a brief a statement on how can we construct them.

a.

b.

c.

d.

2. How can planning through Financial Statement be useful for the entrepreneur?

Activity 2:

Complete the sentence below.

1. In forecasting, it is important to examine the critical values that affect the industry and business that one is in and assess how these variables will behave so that ____________________________________________________________.

2. In the deciphering the past financial condition of an enterprise, we have to quantify the relationships of the many items found in the different financial statements because _______________________________________________________.

3. Market prices tend to be relatively low in a very competitive business for the reason that _______________________________________________________________.

4. It is important to realize that if one expects inflation to affect major items in the Cost of Sales and in the selling prices of the company, then there is a need to

________________________________________________________________________.

5. The forecaster can use either short or long term loans to fund any shortfall in the financing assets for the reason that ____________________________________.

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