A Firm's Financial Statements Are Tightly Linked Such That an Increase

Essay

A firm's financial statements are tightly linked such that an increase in a key variable on one statement will impact the other financial statements. Assuming a firm's gross margin (i.e., sales less cost of sales) is positive and constant, describe how an increase in revenue will impact net income and in turn the other financial statements? Assume the firm does not pay preferred dividends.