e. Briefly explain how to forecast financial statements using the percent of sales approach. Besure to explain how to forecast interest expenses.
forecasted sales, such as costs, cash, accounts receivable, inventories, net fixed assets, accountspayable, and accruals. Choose other items according to the company's financial policy: debt,dividend policy (which determines retained earnings), common stock. Given the previousassumptions and choices, we can estimate the required assets to support sales and the specifiedsources of financing. The additional funds needed (AFN) is: required assets minus specified