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Multiple Choice
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1

Planning for future growth is called:
A)capital budgeting
B)working capital management
C)financial forecasting
D)none of the above
2

Which one of the following is NOT a tool of financial forecasting?
A)cash budget
B)capital budget
C)pro forma balance sheet
D)pro forma income statement
3

The first step in developing a pro forma income statement is to:
A)build a sales forecast
B)determine the production schedule
C)determine cost of goods sold
D)none of the above
4

Pro forma statements are _______ statements.
A)actual
B)projected
C)a previous year's
D)none of the above
5

All of the following compose cost of goods sold except ________________.
A)raw material
B)labor
C)capital
D)all of the above are part of cost of goods sold
6

Financial managers use the _____________ to plan for monthly financing needs.
A)capital budget
B)cash budget
C)pro forma income statement
D)none of the above
7

The payments that a firm collects from its customers are called _______________.
A)cash disbursements
B)cash outflows
C)cash receipts
D)none of the above
8

Examples of cash disbursements are all but _________________.
A)payment for materials purchased
B)collection of accounts receivable
C)payment of dividends
D)payment of taxes
9

In developing the pro forma balance sheet, we get common stock from _________________.
A)the firm's previous balance sheet
B)the firm's cash budget
C)the firm's income statement
D)none of the above
10

The percent of sales method of financial forecasting shows us the relationship between ___________ and financing needs.
A)changes in the level of liabilities
B)changes in the level of assets
C)changes in debt
D)changes in the level of sales





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