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Homework answers / question archive / The percent of sales model is a financial planning model that assumes that most income statement and balance sheet accounts vary proportionally with sales

The percent of sales model is a financial planning model that assumes that most income statement and balance sheet accounts vary proportionally with sales

Finance

The percent of sales model is a financial planning model that assumes that most income statement and balance sheet accounts vary proportionally with sales.   This model has a weakness related to working capital.  What is this weakness and how does it affect financial planning?

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