1. For both Twitter and Facebook forecasts the Income Statement Uses the sales growth assumption to forecast sales for the next fiscal year. Use cost‑level assumptions to forecast all the operating expenses. At this first stage, we typically leave non-operating expenses and revenues unchanged from prior‑year dollar levels. We return to fine‑ tune these after we forecast the balance sheet. Forecast a preliminary tax expense and net income. We need those numbers to complete the balance sheet.

2. Forecast the Balance Sheet Use the percentage of sales approach to forecast each operating asset and liability, and follow the method described in the module to forecast PPE and intangible assets. Certain operating assets and liabilities will be forecasted to remain unchanged year over year unless we learn otherwise from the financial statements. Forecast debt using the information about scheduled debt maturities. Pay careful attention to forecasting dividends and any stock repurchases or issuances.