Question
X1. Use the assumptions described in the table when modeling items that are not computed as totals or subtotals, or that are not computed using
X1. Use the assumptions described in the table when modeling items that are not computed as totals or subtotals, or that are not computed using information available from the model.
Variable | Modeling assumptions |
Revenue | Annual revenue growth in each forecast year equals the average annual growth rate from the historical period |
Cost of sales | Cost of sales to revenue in forecast year is 2.34 percentage points better than the average from the last 2 historical years |
SG&A and other indirect expenses | SG&A and other indirect expenses to revenue in forecast year is equal to the ratio from the previous year |
Accounts receivable | Accounts receivable days in forecast year is 1.87 days less than the average annual receivable days from the last 3 years of the historical period |
Inventory | Inventory days in forecast year equals the average annual inventory days from the historical period |
Accounts payable | Accounts payable days in forecast year is 5.93 days more than the average annual accounts payable days from the last 2 years of the historical period |
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