Which of the following statements about the percent-of-sales method of financial - 3042

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Which of the following statements about the percent-of-sales method of financial forecasting is true?

A. It is a much more precise method of financial forecasting than a cash budget would be.

B. It is the least commonly used method of financial forecasting.

C. It involves estimating the level of an expense, asset, or liability for a future period as a percent of the forecast for sales revenues.

D. It projects all liabilities as a fixed percentage of sales. 

Solution Description

Which of the following statements about the percent-of-sales method of financial forecasting is true?