A benefit of using projected balance sheets and income statements is that
A) an organization can compute projected financial ratios under various scenarios.
B) money can be put aside to pay future income taxes.
C) insurance needs can be computed.
D) it is useful in analyzing past performance.
E) All of the above

Question

Quizplus · Accepted Answer

Projected balance sheets and income statements allow an organization to calculate projected financial ratios under different scenarios, which is a significant benefit. It can help the organization to make informed decisions regarding future financial planning and investments. The other options, such as putting money aside for future taxes, computing insurance needs, and analyzing past performance, are also important benefits but not as relevant to projected financial statements.

A Benefit of Using Projected Balance Sheets and Income Statements