The percent of sales method provides a more detailed plan for future financing needs than the cash budget because both pro forma income statements and balance sheets are used in the analysis.

Question

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The percent of sales method is less detailed compared to the cash budget because it primarily focuses on projecting sales and related account balances, while a cash budget provides a detailed forecast of cash inflows and outflows, offering a more comprehensive view of future financing needs.

The Percent of Sales Method Provides a More Detailed Plan