Learning Outcome


After studying this chapter, you should be able to:

   To comprehend the function of budgets in planning and preparing pro forma statements.

   To realize why positive profits can still result in a negative cash flow.

   To learn how to prepare monthly pro forma cash flow, income, balance sheet, and sources
          and uses of funds statements for the first year of operation.

   To explain the application and calculation of the break-even point for the new venture.