When developing forecasted financial statements there are some inputs that management controls such as the growth rate and operating costs/sales ratio, while other inputs such as the tax rate and interest rate are not under its control. 1. True2. False

Question

Kahlua

Business

5 January, 08:57

When developing forecasted financial statements there are some inputs that management controls such as the growth rate and operating costs/sales ratio, while other inputs such as the tax rate and interest rate are not under its control. 1. True2. False

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Ulises Gutierrez · Answer 1

True

Explanation:

The reason is that the company tries to control the sales and costs which are largely in their control and have no control over the costs that are imposed by the government and lender's interest cost. These costs and sales projections are used to generate a forecasted financial statements to develop the understanding of the business future and associated plans pursuing capabilities of the firm.