FORECASTING, BUDGETING, AND BUSINESS VALUATION
The sales forecast is the first step in the preparation of a budget and a master plan for the company. A master budget is a formal statement of management's expectation regarding the organization's sales, expenses, volume, and other financial transactions for a specified period. Simply put a budget is a set of projected or planned financial statements. It consists basically of a pro forma income statement, pro forma balance sheet, and cash budget.