CEVAP:

The planning process should be designed to be revised periodically to reflect the effects of those changes to the financial plans. The assumptions used may be:

• The effectiveness and length of cash conversion cycle

• The sales and collection policies,

• Capital budgeting techniques,

• The cost of capital and its revisions

  depending on the financial circumstances,

• Target capital structure,

• The cash dividend policy,

• The tendency to finance the working capital

  needs by short-term borrowings