Which one of the following statements is true concerning the construction of pro forma statements using the percentage of sales approach?
A) The profit margin tends to vary considerably.
B) The dividend dollar amount is held constant.
C) Long-term debt is held as a constant percentage of sales.
D) Retained earnings vary directly with sales.
E) Inventory generally varies directly with sales.
Correct Answer:
Verified
Q291: Financial planning:
A) Is limited to projecting activities
Q292: Which of the following is a factor
Q293: Sales can often increase without increasing which
Q294: Generally, fixed assets only vary directly with
Q295: If we assume for forecasting purposes that
Q297: The sustainable rate of growth assumes that
Q298: Suppose a firm is working at full
Q299: If a firm is at full-capacity sales,
Q300: Nagel's Industries has a capital intensity ratio
Q301: The plowback ratio:
A) Is equal to net
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