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A constant payout ratio implies dividends vary with earnings.​

Even if the interest rate is only 1%, a lump sum of $1,000 today is preferred to $100 a year for 10 years.​

A stock dividend causes the firm’s

If accounts receivable are 20% of sales and the level of sales doubles, the percent of sales says that accounts receivable will be 40% of sales.​

Equity includes

If accounts receivable are 20% of sales and the level of sales doubles, the percent of sales says that accounts receivable will be 40% of sales.​

The more rapidly inventory turns over, the more finance the firm needs. /span>​

Current assets include

Issuing new stock or borrowing from a bank is a cash inflow. ​

Long‑term debt spontaneously changes with the level of sales.