What 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 which items are not likely to vary as directly with sales volume?
Answer to relevant QuestionsWhy does it make sense to let the firm’s cash balance or a short-term liability account serve as the plug figure in pro forma projections? Why not use gross fixed assets as the plug figure? Eisner Amusement Parks reported the following data in its most recent annual report: Sales ......... $42.5 million Net income........ $3.8 million Dividends ........ $1.1 million Assets ......... $50.0 million Eisner is ...The actual sales and purchases for White Inc. for September and October 2012, along with its forecast sales and purchases for the November 2012 through April 2013, follow. The firm makes 30 percent of all sales for cash and ...What is the primary goal of the financial manager with regard to inventory management? How does this goal compare to the inventory goals of production and marketing? What is credit monitoring? How can each of the following techniques be used to monitor accounts receivable? What are their attributes? a. Average collection period b. Aging of accounts receivable c. Payment-pattern ...
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