The basic driving variable for a company's short-term financial planning model would be:

Question

Quizplus · Accepted Answer

Sales are the basic driving variable for a company's short-term financial planning model as they determine the amount of revenue that the company will generate in the short-term. From this revenue figure, the company can then determine its expenses, profits, and cash flows for the short-term. Gross profit margin, desired ending inventory, and debt maturity structure are also important factors in short-term financial planning, but they are more dependent on the level of sales and the company's overall financial strategy than vice versa.

The Basic Driving Variable for a Company's Short-Term Financial Planning