Use the percent of sales method to forecast next yera's accounts payable.

Current year sales are $24,500,000 and sales are expected to rise by 25%. The firm's accounts payable balance is $1,701,600. What is the projection for next year's accounts payable?

Hot, lukewarm, or cold as Haagen Dazs... ya still got to read and comply with the homework help rules first.

What exactly does sales have to do with accounts payable?

It's one of those "high altitude" analyses that an analyst might perform on a company when only limited data is available. It applies when there's a demonstrated correlation between a company's sales level, and its AP balances.

Similar to forecasting inventory levels, or PP&E needs, e.g. when those items tend to maintain a particular size relationship vis-à-vis sales. I.e. More Sales = Larger Company = Larger Balance Sheet Items.

Just for a back-of-the-cocktail-napkin calculation, when better AP forecasts aren't available.

So now you know why I don't answer many finance questions. LOL.