Financial forecasting involves the projection and estimation of a firms future cash needs. The percentage of sales method, cash budgeting, the pro forma statement of cash flows, and computerized financial planning models are used in financial forecasting. Pro forma financial statements are usually an integral part of any financial plan and show the results of some assumed rather than actual events. The percentage of sales method of forecasting is used to estimate the amount of additional financing that will be needed (AFN) to support a given future sales level. Comment on these statements after reading Chapter 4