Which one of the following is correct in relation to pro forma statements?

Corporate Finance

Which one of the following is correct in relation to pro forma statements?

Fixed assets must increase if sales are projected to increase.
Net working capital is affected only when a firm's sales are expected to exceed the firm's current production capacity.
The addition to retained earnings is equal to net income plus dividends paid.
Inventory changes are directly proportional to sales changes.

Which one of the following is correct in relation to pro forma statements?Answer:Inventory changes are directly proportional to sales changes.

Tags: Long-Term Financial Planning and Growth