The percent of sales method of forecasting assumes which of the following is constant?
A) inventory as a percent of sales
B) equity as a percent of sales
C) long‑term debt as a percent of total assets
D) accounts payable as a percent of total assets

Question

The percent of sales method of forecasting assumes which of the following is constant?​
A) ​inventory as a percent of sales
B) ​equity as a percent of sales
C) ​long‑term debt as a percent of total assets
D) accounts payable as a percent of total assets

Quizplus · Accepted Answer

The percent of sales method assumes that certain items on a company's financial statements remain constant relative to sales. Inventory is one of those items. Therefore, the answer is A. The other options listed are not assumed to be constant in the percent of sales method.

The Percent of Sales Method of Forecasting Assumes Which of the Following