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Describe the short-comings of the percent of sales method of financial
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- Calculate the projected price/earnings ratio and market/book ratio. Do these ratios indicate that investors are expected to have a high or low opinion of the company?The reliability of short-term cash forecast depends most heavily on the quality of: a) sales forecast b) cost of goods sold forecast c) current ratio forecast d) shares outstanding forecastThe debt ratio is used primarily as a measure of: Short-term liquidity. Profitability. Creditors' long-term risk. Return on Investment.
- Which one of the following is most closely related to the net present value profile? A: Payback B: Discounted payback C: Profitability index D: Average accounting return E: Internal rate of returnWhen preparing a projected income statement, which of the following additional information, other than the financial statements would probably not be relevant? a) Expected capital expenditure b) The competitive environment c) New versus old store mix d) Expected level of macroeconomic activityIf a sales increase is forecasted, how will it affect expenses on the pro forma income statement if market conditions are expected to remain stable
- What advantages does the forecasted financial statement method have over theAFN equation for forecasting financial requirements?Why is an accurate sales forecast critical for financial planning?When is the forecasted growth rate in residual operating income the same as the forecasted growth rate in sales? Kindly answer the question with introduction and conclusion based on the concept of the question. Explain the answer properly considering the accounting aspect of it.
- which one is correct please confirm? QUESTION 9 In using the percentage of sales forecasting method, the assumption is that ______________. a. there is a direct relationship between notes payable and sales b. accounts payable will not increase proportionally with sales c. there is a direct relationship between long-term debt and sales d. inventories will increase proportionately with salesWhich risk ratios best answer each of the following financial questions? a. How quickly is a company able to collect its receivables? b. How quickly is a company able to sell its inventory? c. Is the company able to make interest payments as they become due?True or False Sales projections and the ability to accurately predict the future have a large impact on cash flow targets.