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Unformatted text preview: necessary amount and timing of a company’s future cash requirements. A company uses the pro forma statement in the process of business planning and control. Since pro forma statements are presented in a standardized format, management uses them to compare and contrast alternative business plans. Determining the amount to be financed and the type of financing depends on the balancing item. The balance item could be either new debt or new equity. By arranging the operating statements with the financial statements, the management analyzes the projected results of the competing plans in order to decide which is best for the business. References Brealey, R. A., Myers, S. C., & Marcus, A. J. (2004). Fundamentals of corporate finance (4th ed.). [University of Phoenix Custom Edition e-text]. New York, New York; McGraw Hill/ Irwin. Retrieved May 28, 2007, from University of Phoenix, Resource....
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- Spring '10
- Finance, Financial Forecasting, financing capital requirements, financial investment decisions