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The pro-forma balance sheet can be used to begin to answer the following: - How increases in assets have been financed - It can help

The pro-forma balance sheet can be used to begin to answer the following: - How increases in assets have been financed - It can help top management figure out the kinds of financing to increase or decrease based on expectations in the coming period (year, quarter, etc). - To create strategic or operational goals to help organizations run better and to address agency theory issues in the process - As a communication tool for any stakeholder of the company (bankers, lenders, stockholders) to help guide the future. - As a way to predict future financial ratios and the interpretations that come out of them before they actually occur. True False

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