When forecasting statements, assets always increase proportionately to sales regardless of capacity.

Question

Quizplus · Accepted Answer

Assets do not always increase proportionately to sales. It depends on the capacity and efficiency of the company's operations. If the company is operating at full capacity, additional sales may not result in a proportionate increase in assets as the company may not have the resources to produce more. Additionally, if the company is operating inefficiently, additional sales may result in a higher proportionate increase in assets as the company may need to invest in more resources to produce the additional sales.

When Forecasting Statements, Assets Always Increase Proportionately to Sales Regardless