Question 2.RQ.1: In what ways might projected financial statements help a bus...

When a business is growing fast, it is vital that managers maintain a balance between increases in the level of sales and the finance available to sustain this increase. The business must not pursue sales growth to the point where it becomes financially overstretched and then collapses. Projected financial statements will show the impact of future changes in sales on the profitability, liquidity and financing requirements of the business. If the business shows signs of being unable to sustain the required level of sales growth in the future, corrective action can be taken.