Title: Describe the purpose of a financial model (pro forma).
Course: Entrepreneurship (12053-I) > Section: Understanding Financial Statements

Description should include the concepts that a financial model

- outlines expected expenses and revenues of a business over a certain period of time
- serves as a tool for planning and decision-making.

Process/Skill Questions:

- What types of financial information should be included in a budget? Why?
- How can budget preparation assist in decision-making?
- How does the budgetary process affect marketing mix decisions? Product mix decisions?
- How can a budget assist the business owner in planning for the future?
- What are potential consequences if a business owner does not prepare a budget?
- What resources are available to help an entrepreneur develop an effective budget?
- Why is the budgetary process important in the strategic planning process?
- What is the benefit of comparing budgets to historical business performance data?