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Pro forma financial statements, by definition, are predictions of a companys financial statements at a future point in time. So why is it important to
Pro forma financial statements, by definition, are predictions of a companys financial statements at a future point in time. So why is it important to analyze the historical performance of the company before constructing pro forma financial statements? Sequoia Furniture Company's sales over the past three months, half of which are for cash were as follows: March April May $430,000 $682, eee $550,00 a. Assume that Sequoia's collection period is 60 days. What would be lts cash receipts in May? What would be its accounts receivable balance at the end of May? Cash receipts Accounts receivable balance b. Now assume that Sequoia's collection period is 45 days. What would be its cash receipts in May? What would be its accounts receivable balance at the end of May
Pro forma financial statements, by definition, are predictions of a companys financial statements at a future point in time. So why is it important to analyze the historical performance of the company before constructing pro forma financial statements?
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