How did Mehta construct his financial forecast?

Mr. Mehta developed a monthly forecast of financial statement by using the current operating
assumptions, as an alternative way of looking at the forecast funds flows, Mr Mehta also prepared a
forecast of cash receipts and disbursement.

To prepare a financial forecast, Mr mehta would improve on various parameters, Cost of good sold
would run at 73.7 percent of gross sales. a figure that was up from recent years because of increasing
price competition. Operating expenses would be about 6 percent of sales. also up from recent years to
include the addition of quality control department, two new sales agents and three young nephews in
whom she hoped to built an allegiance to the Pundir family business