ABSTRACT
In the previous chapter we looked at some methods for nancial analysis. In this chapter we will continue to study some useful tools and methods for nancial analysis and planning. e tools we will discuss include methods for projecting pro forma nancial statements, the concept of sustainable growth, concepts of cash ow, and the development of cash budgets. Even though it may not seem like these topics are helping us build nancial models, they are, in fact, very important for understanding the structures of the models we will build in the following chapters. Building correct models will be dependent on having a clear understanding of cash ows, cash budgets, pro forma nancial statements, and growth. Reviewing the de nitions and interrelationships between these factors will make it easier to understand subsequent modeling, and help you to develop your own models that work correctly.
