When forecasting the balance sheet, what happens when the initial balance sheet yields estimated total assets greater than the sum of total liabilities and equity?
A) The company will need additional financing from external sources.
B) The company will not be able to pay for expenses in the future.
C) The company projected a loss.
D) The company has negative stockholders' equity.
E) None of the above

Question

Quizplus · Accepted Answer

When the estimated total assets exceed the sum of total liabilities and equity, it indicates a financing gap. The company will need additional financing from external sources to cover this gap and support its asset base.

When Forecasting the Balance Sheet, What Happens When the Initial