Which of the following statements about the process of forecasting a firms pro forma Financial Statements is TRUE?

	1.	The best approach to forecasting a firms future sales is to use its historical growth in sales
	2.	If a firms net financial obligations (NFO) increases, its shareholders equity (S/E) must decrease because NOA = NFO + S/E
	3.	Without an enduring competitive advantage, a firms abnormal earnings (residual income) will ultimately decline
	4.	The focus of the forecasting process should be on the firms transitory (core) earnings