Percentage of Sales Models Usually Assume That Costs, Fixed Assets

question 14

Essay

Percentage of sales models usually assume that costs, fixed assets, and working capital all increase at the same rate as sales. When do you think that these assumptions do not make sense? Would you feel happier using a percentage of sales model for short-term or long-term planning?

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Definitions:

Sustainability

In the CSR context, a business strategy that creates long-term stakeholder value by considering the ethical, social, environmental, cultural, and economic spheres.

Brands

Distinctive symbols, names, or marks that identify and differentiate products or services of a particular seller or group of sellers.

Synergistic Relationship

A cooperative interaction between two or more entities that results in a combined effect greater than the sum of their separate effects.

Stakeholders

Individuals or groups that have an interest in or are affected by the operations and decisions of a business or organization.