Without plagiarizing please grammatically and professionally correct answer the

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Without plagiarizing please grammatically and professionally correct answer the following: Forum 6 - Pro Forma Statements Assess your knowledge of financial statements and particularly pro forma statements and respond to the following questions:
Explain any gaps in your knowledge about pro forma statements. Evaluate the necessity of an entrepreneur using pro forma statements. Initial posting minimum 300 words
Replies 150 words each
Review forum rubric
Without plagiarizing please grammatically and professionally correct answer the following: Forum 6 - Pro Forma Statements Assess your knowledge of financial statements and particularly pro forma statements and respond to the following questions:
Explain any gaps in your knowledge about pro forma statements. Evaluate the necessity of an entrepreneur using pro forma statements. Initial posting minimum 300 words
Replies 150 words each
Review forum rubric
Without plagiarizing please grammatically and professionally correct answer the following: Forum 6 - Pro Forma Statements Assess your knowledge of financial statements and particularly pro forma statements and respond to the following questions:
Explain any gaps in your knowledge about pro forma statements. Evaluate the necessity of an entrepreneur using pro forma statements. Initial posting minimum 300 words
Replies 150 words each
Review forum rubric

Explanation / Answer

The first part of the question is specific to the individual.

Necessity of an entrepreneur using pro forma statements

A pro forma statement, in the context of business or entrepreneurship refers to a statement used for projecting business performance. Any new entrepreneur would like to have some clarity with respect to future business performance metrics like sales, profits, expenses, income, etc. This helps him in planning, decision making, performance review or to seek more funding from venture capitalists, audit purposes, etc.

There are three primary pro forma statements which are necessary for a business:

A projection regarding all the above performance metrics is crucial for any business to plan the future course of action. E.g. If the pro forma income statement shows that the cost of selling the goods is increasing periodically, then the business can take appropriate measures to bring it under control, thereby improving the performance.

Any investor will always want to make sure that his / her investment is safeguarded. A pro forma financial statement is the only way of knowing this. Based on these, they can decide whether or not it will be profitable to invest in a particular business.

Keeping in mind all these factors, we can understand how important it is for businesses to prepare pro forma statements.

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