Question 2.RQ.2: ‘The future is uncertain and so projected financial statemen...

It is true that the future is uncertain. It is also true that projected financial statements will often prove to be inaccurate. However, most businesses find that, despite the inaccuracies inherent in forecasting, it is better to produce these statements than not to do so. The question to be asked is: can a business function if no projections are made available to managers? The problem of uncertainty should not prevent some form of financial planning. It is far better to deal with uncertainty through such techniques as sensitivity analysis and scenario analysis.