Name three things that a pro forma income statement can tell us. What

Name three things that a pro forma income statement can tell us.

What will be an ideal response?

ANSWER

Answer: For every sales dollar, it tells us the following three things: the percentage of the cost of goods sold, the percentage of profit, and the percentage paid out in dividends. For example, consider the percentage paid out in dividends. If the percentage is one percent, this means that for every sales dollar, one penny is paid in dividends.