QUESTION $10$

Could a company's change in net working capital be negative in a given year? $($Hint: Yes.$)$ Explain how this might come about. What about cash flow to creditors?

liquidated than purchased.

repayment terms.

QUESTION $11$

from the same stores or restaurants at two different points in time. Why might companies focus on same$-$store sales rather than total sales?

this by only looking at revenues of stores open within a specific period.

cause new store sales to decrease.

total sales at two different points in time is a leading indicator for identifying increases in total sales.

QUESTION $12$

Why do you think most long$-$term financial planning begins with sales forecasts? Put differently, why are future sales the key input?

support sales. Put differently, a firm's future need for things like capital assets, employees, inventory, and financing are determined by its future sales level.

Future sales are the key input because the analyst has the ability to forecast a positive outcome without the constraints of reality of business.

Future sales are the key input because cost of goods sold is unpredictable over the long term.