The projected balance sheet method assumes that the key ratios are constant,which means,for example,that if you plotted a graph of inventories versus sales,the regression line would be linear and would have a positive Y-intercept.

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The projected balance sheet method does not necessarily assume that key ratios are constant in a way that would imply a linear relationship with a positive Y-intercept between inventories and sales. It involves forecasting future balance sheets based on assumptions about how balance sheet items will change with sales or other activity measures, but these relationships can be non-linear or have different characteristics depending on the specific assumptions made.

The Projected Balance Sheet Method Assumes That the Key Ratios