S1: When developing forecasted financial statements there are some inputs that management controls such as the growth rate and operating costs/sales ratio, while other inputs such as the tax rate and interest rate are not under its control. S2: A rapid build-up of inventories normally requires additional financing, unless the increase is matched by an equally large decrease in some other asset. a. Both statements are true. b. Only statement 1 is true. c. Only statement 2 is true. d. Both statements are false.
S1: When developing forecasted financial statements there are some inputs that management controls such as the growth rate and operating costs/sales ratio, while other inputs such as the tax rate and interest rate are not under its control. S2: A rapid build-up of inventories normally requires additional financing, unless the increase is matched by an equally large decrease in some other asset. a. Both statements are true. b. Only statement 1 is true. c. Only statement 2 is true. d. Both statements are false.
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter5: Risk Analysis
Section: Chapter Questions
Problem 2QE
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S1: When developing
a. Both statements are true.
b. Only statement 1 is true.
c. Only statement 2 is true.
d. Both statements are false.
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