One of the necessary steps in the financial planning process is a forecast of financial statements under each alternative version of the operating plan in order to analyze the effects of different operating procedures on projected profits and financial ratios. A) TrueB) False

Question

Marshall Medina

Business

17 June, 07:14

One of the necessary steps in the financial planning process is a forecast of financial statements under each alternative version of the operating plan in order to analyze the effects of different operating procedures on projected profits and financial ratios. A) TrueB) False

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Franco · Answer 1

A) True

Explanation:

When you are elaborating a financial plan your ultimate goal is to determine in what projects or activities should your company invest its resources. In order to decide which alternative better suits your company, you must be able to compare how your company will be affected by the different options available. The only way to compare this is by forecasting different financial statements for every possible alternative that your company might choose.