Creating pro forma statements


In creating pro forma statements, if we assume that costs, assets, and short-term debt vary directly with changes in sales, that the payout ratio is fixed, and that the change in long-term debt only results from payments made as required on the debt contracts, then the item required for the balance sheet to balance will probably be:

A) Dividends.

B) Total debt.

C) Long-term debt.

D) New equity sales.

E) Retained earnings.

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Business Management: Creating pro forma statements
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