The key input to the short-term financial planning process is ________.
A) the audit report
B) the pro forma balance sheet
C) the sales forecast
D) the pro forma income statement

Question

Quizplus · Accepted Answer

The key input to the short-term financial planning process is the sales forecast. This helps to estimate the cash inflows in the short term, which is essential in determining the available liquidity to cover short-term expenses and make informed decisions regarding borrowing and investing. The pro forma balance sheet and income statement are derived from the sales forecast and other relevant information, whereas the audit report is a review of the financial statements and not directly related to the short-term planning process.

The Key Input to the Short-Term Financial Planning Process Is