rajam

What is percent of sales method?

I was stuck in understanding this while I was preparing for the term exams.
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marphy
The Percentage of Sales Method is a Financial Forecasting approach which is based on the premise that most Balance Sheet and Income Statement Accounts vary with sales. Therefore, the key driver of this method is the Sales Forecast and based upon this, Pro-Forma Financial Statements (i.e., forecasted) can be constructed and the firms needs for external financing can be identified.
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christin
"General: Technique of estimating cash prerequisites by indicating revenues along with expenditures because percentages regarding gross revenue, and taking advantage of these types of rates to create an expert forma operating statement. "
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