The percentage of sales forecasting method assumes which of the following?
A) present asset levels are suboptimal with respect to present sales
B) present asset levels are optimal with respect to present sales
C) most items on the balance sheet are indirectly proportional to sales
D) none of these are correct

Question

Quizplus · Accepted Answer

The percentage of sales forecasting method assumes that present asset levels are optimal with respect to present sales. This method uses historical data to estimate future sales and then calculates the necessary assets needed to support those sales. Therefore, it assumes that present asset levels are appropriate for the current level of sales.

The Percentage of Sales Forecasting Method Assumes Which of the Following