Describe the differences between top-down and bottom-up sales forecasting methods. Describe advantages and disadvantages of each. Do you think one approach is likely to be more accurate than the other?
Answer to relevant QuestionsWhat is the logic of the percentage-of-sales method for constructing pro forma statements? On a year-to-year basis, which balance sheet and income statement items do you think will fluctuate most closely with sales, and ...Explain how slower inventory turnovers, slower receivables collections, or faster payments to suppliers would influence the numbers produced by a cash budget. Bachrach Fertilizer Corp. had sales of $2 million in March and $2.2 million in April. Expected sales for the next three months are $2.4 million, $2.5 million, and $2.7 million. Bachrach has a cash balance of $200,000 on May ...Assume that the financial manager is considering stretching the firm’s accounts payable by paying its vendors at a later date. What are the key cost trade-offs that would be involved when making this stretching decision? ...For a firm contemplating an increase in the cash discount it offers credit customers for early payment, what key variables should be considered when quantitatively analyzing this decision? How do the variables used in this ...
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