Mission, Vision, Goals, Strategies, Actions and Tactics About This Section Our startup enterprise has done well. The investors are happy with our progress and we can feel change jingle in our pockets. "AppleSeed" has become a well-recognized brand name and the demand for our prod- ucts is strong. It was not easy to raise the initial capi- tal for our risky startup venture. Never- theless, Great Aunt Lillian saw our poten- tial, placed a bet and nanced us. Now even Great Uncle Fred, skeptical before, is happy with their investment. In fact, at the company picnic he asked me to see him rst if we needed money to expand! Yes, we have come to that happy time in the history of a business--time to ask the questions: "Should we expand?" And if so, "How?" The rest of this book will deal with AppleSeed Enterprises's growth. Historical vs. Proforma Financials Previous chapters show how to report a company's historical nancial perform- ance. Now we are going to look forward and predict the future. We will learn how to analyze alternative investment choices and make plans that will shape our com- pany's future success. In our analysis of future investment alternatives, we will be preparing so- called proforma nancial statements. Pro- forma means "for form." Proforma nancial statements are in the exact same format as regular historical statements but are used to model the ex- pected future performance of the company. Proforma nancials (especially proforma cash ow statements) are useful tools to evaluate the impact of major capital in- vestment by the company. They answer the question, "How might our nancial future look if we make this investment?" Qualitative and Quantitative Methods The essence of business is to mobilize capital (money) to generate prot (more money). How successful we are often depends on making good capital invest- ment decisions. In this section, we discuss qualitative tools useful in analyzing business deci- sions: building decision trees, using stra- tegic planning methods and understanding risk and uncertainty in any decision. But it takes money to make money, and in the last chapter in this section, Apple- Seed Enterprises will sell additional equity and take on more debt to nance an ag- gressive expansion. Then Section E will focus on impor- tant quantitative tools (net present value, internal rate of return and others) useful in selecting between alternative capital investments. "The chief determinant of what a company will become is the investments it makes today. The generation and evaluation of creative investment proposals is far too important to be left to nancial specialists; instead it is the ongoing responsibility of all managers throughout the organization." Prof. Robert C. Higgins University of Washington in Analysis for Financial Management -- 219 --