The objective of forecasting is to develop:
A) stand-alone financial statements for future analysis.
B) a set of realistic expectations for future value-relevant payoffs.
C) a balance sheet and income statement that articulate.
D) financial statements for comparison to industry averages.

Question

Quizplus · Accepted Answer

The objective of forecasting is not to develop stand-alone financial statements or to compare to industry averages. Rather, it is to develop a set of realistic expectations for future value-relevant payoffs, such as projected revenues, expenses, profits, and cash flows. This can be useful for decision-making and evaluating investment opportunities.

The Objective of Forecasting Is to Develop