Forward would distort your forecast of free cash flow

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Reference no: EM131852145

HouseholdCo, a large household products firm, recently reported $6.2 billion in accrued and other liabilities and $49 billion in revenues, such that accrued and other liabilities equaled 12.6% of revenues. Using data from the annual report's footnote 4, provided in Exhibit 11.15, discuss why a forecast ratio of 12.6% going forward would distort your forecast of free cash flow. How should the Balance sheet be reorganized to prevent this?

Reference no: EM131852145

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