Author Question: An external sales forecast is based on ________. A) the relationships between a firm's sales and ... (Read 33 times)

littleanan · **on:** Jul 10, 2018

An external sales forecast is based on ________.

A) the relationships between a firm's sales and certain key economic indicators such as GDP and consumer confidence
B) a buildup, or consensus of sales forecasts through a firm's own sales channels
C) the prediction of a firm's sales over a given period through the analysis of the sales trends of its competitors
D) developing the pro forma income statement to forecast sales and then express the various income statement items as percentage of projected sales

Question 2

The income statement begins with revenue and subtracts various operating expenses until arriving at Earnings Before Interest and Taxes. Next, interest expense is subtracted to find the taxable income for the period.

Then the appropriate taxes are calculated and subtracted. We finally arrive at the ________, the so-called bottom line of the income statement.
A) after-tax income
B) before-tax income
C) net income
D) EBIT

jesse.fleming · **Reply #1 on:** Jul 10, 2018

Answer to Question 1

A

Answer to Question 2

Answer: C
Explanation: C) The income statement begins with revenue and subtracts various operating expenses until arriving at Earnings Before Interest and Taxes (EBIT). Next, interest expense is subtracted to find the taxable income for the period. Then the appropriate taxes are calculated and subtracted. We finally arrive at the net income, the so-called bottom line of the income statement.