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Assignment 1: Discussion-Forecasting and Preparing Financial Statements
Tina, one of your friends, approached you and proposed a partnership in a new venture that she is planning to start-a fashion boutique that will sell women's clothing and accessories. She told you that she leafed through several books on how to prepare forecasts and pro forma financial statements, but the books were geared toward existing firms that have several years of historical financial statements on which to base their projections.
In this assignment, you will review the accounting concepts and financial statements presented in this module to critically evaluate the challenges faced by your friend in her new business venture.
Tasks: Respond to the following points:
• If your friend asked you for advice on how to prepare forecasts for a new fashion boutique for women, what would you tell her?
• As a potential partner, what would be the important financial statements to be in place for an initial assessment of the venture? Provide details and justification of each choice.
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