Acc 308 5-1 Final Project Milestone Two: Management Analysis

ACC 308 5-1 Final Project Milestone Two: Management Analysis BriefSouthern New Hampshire University 03:38:49 GMT -05:00My objective in this managerial analysis brief is to analyze how pro forma financial statements can be used to predict future growth objectives, how inventory costs are calculated, contingent liabilities are accounted for, and revenue is recognized, along with identifying potential financial statement issues. A substantial amount of growth has been experienced byPeyton Approved over the past few years. If Peyton Approved goes ahead with its plans to open a new location, pro forma statements based on financial statements from 2015-2018 can be generated to predict the company's continued success.In order to make an informed decision, Peyton Approved creates pro forma financial statements. A new location will involve multiple costs, including obtaining additional commercial space, maintaining new equipment, hiring workers, and increasing expenses. Management and investors need to keep in mind that pro forma income statements and pro formal balance sheets are only a prediction and not created or regulated by Generally Accepted Accounting Principles (GAAP). This type of pro forma financial statement should be presented to potential investors as a projection rather than an actual financial statement. Despite the projected positive net