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Question: 1. Percent of sales forecasting) Which of the following accounts would most likely vary directly with the level of a firm's sales? Discuss each briefly.

2. (Financial forecasting-percent of sales) Rainbow Company's balance sheet is as follows

Current level of sales is $450,000 and is expected to grow up to $600,000

a. Develop a proforma balance sheet for the firm if net fixed assets, bonds payable, and common equity remain the same. Assume Rainbow Company will distribute all net income as dividends, and the rest of balance sheet will vary according to sales.

b. What is a need for "new" financing?

c. What are the limitations of assumptions and percentage of sales method?

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92297531

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