The percent-of-sales method of financial forecasting
A) is more detailed than a cash budget approach.
B) requires more time than a cash budget approach.
C) assumes that balance sheet accounts maintain a constant relationship to sales.
D) provides a month-to-month breakdown of data.

Question

Quizplus · Accepted Answer

The percent-of-sales method assumes that balance sheet accounts maintain a constant relationship to sales. It does not necessarily provide a month-to-month breakdown of data and may take less time than a cash budget approach, as it relies on a simple formula to calculate projected financial data. However, it may be less detailed than a cash budget approach.

The Percent-Of-Sales Method of Financial Forecasting