explain how management goals are incorporated, Financial Management

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explain how management goals are incorporated

Explain how management goals are incorporated into pro forma financial statements.

Management locates a target goal, and forecasters produce pro forma financial statements within the assumption that the goal will be reached. For instance, if management’s goal is to pay off all short-term notes throughout the coming year, forecasters would incorporate this into the pro forma balance sheet by setting Notes Payable to zero.

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