A weakness of the percent-of-sales method of preparing a pro forma income statement is the difficulty faced in calculation and preparation of such statements the assumption that the firm faces linear total revenue and total operating cost functions that it forecasts income and then expresses the various income statement items as percentages of projected income. the assumption that the firm's past financial condition is an accurate predictor of its future

A weakness of the percent-of-sales method of preparing a pro forma income statement is the difficulty faced in calculation and preparation of such statements the assumption that the firm faces linear total revenue and total operating cost functions that it forecasts income and then expresses the various income statement items as percentages of projected income. the assumption that the firm's past financial condition is an accurate predictor of its future