Sales Growth and an Assessment of Cash Flow

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HYPERLINK "" Abstract: This paper explores a companies sales growth, operating leverage, return on invested capital, and weighted cost of capital. This study uses financial data from an income statement, balance sheet, cash flow statement, and financial ratios. The paper forecast sales growth for a corporation, and concludes with an assessment cash flow. I. Sales Growth & Operating Leverage A. Sales Growth Considerations Suleiman's ability to increase fulfillment of its payable accounts or liabilities depends on future sales or more precisely sales growth. The company's past and future sales performance will help determine its future revenue, solidify a means to pay liabilities, and clarify its path to shortening payment cycles to lenders and suppliers. However, both lenders and suppliers need viable financial indicators to continue offering financing: Advani (2013) explains that investors, for example, will be reluctant to provide capital without a sales forecast. In performing a sales forecast, Advani (2013) suggests that expenses initially represent more predictable financial factors than revenue. Certain fixed costs, for instance, delineate expected certainties, and variable costs occur with regularity. Some examples of fixed costs include: utility bills, phone bills, advertising, salaries, and rent. Variable cost examples include: materials and supplies, packaging, customer service, direct sales, and direct marketing.

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