Which of the following is a limitation of the ldquopercent, Ask an Expert

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Which of the following is a limitation of the “percent of sales method” of preparing pro forma financial statements?

A. Inventory levels are seldom affected by changes in sales volume.

B. A firm’s investment in accounts receivable is seldom related to sales volume.

C. Not all assets and liabilities increase or decrease as a constant percent of sales.

D. The dividend payout ratio may change from one year to the next.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91546398

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