- CFA Exams
- CFA Level I Exam
- Study Session 10. Equity Valuation (2)
- Reading 26. Industry and Company Analysis
- Subject 3. Balance sheet and cash flow statement modeling
CFA Practice Question
For most companies, projections for ______ are directly tied to the income statement.
A. retained earnings.
B. accounts receivable.
C. long-term assets.
Explanation: Retained earnings are directly from income statement.
User Contributed Comments 3
| User | Comment |
|---|---|
| Friso | I disagree with this answer. Dividends are not part of the income statement and retained earnings are after dividends. Thus none of these answers really fit. |
| janis36 | If you are doing forecasting you would start with forecasting sales and then projected AR would be linked to sales. I picked answer B. |
| giovannig | Statement of income will in fact have change in retained earnings as the difference between this period and last period from the balance sheet. |