Sparky's sells auto parts. Provided below is selected financial information from the company's annual report: Sparky's...

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Sparky's sells auto parts. Provided below is selected financial information from the company's annual report: Sparky's Selected Financial Statement data Fiscal year end (amounts in thousands of dollars) Net sales Cost of Goods Sold Gross Profit Inventory Year 2 $125,410 -104,090 $21,320 $15,000 Year 1 $106,380 -89,359 $17,021 $14,000 Sparky's forecasts that sales will grow by 25% in Year 3 and that its cost of goods sold to sales ratio will be the same in Year 3 as it was in Year 2. If these assumptions prove correct and Sparky's inventory turnover ratio for Year 3 is 6.5 what will be the level of inventory at the end of Year 3? Sparky's sells auto parts. Provided below is selected financial information from the company's annual report: Sparky's Selected Financial Statement data Fiscal year end (amounts in thousands of dollars) Net sales Cost of Goods Sold Gross Profit Inventory Year 2 $125,410 -104,090 $21,320 $15,000 Year 1 $106,380 -89,359 $17,021 $14,000 Sparky's forecasts that sales will grow by 25% in Year 3 and that its cost of goods sold to sales ratio will be the same in Year 3 as it was in Year 2. If these assumptions prove correct and Sparky's inventory turnover ratio for Year 3 is 6.5 what will be the level of inventory at the end of Year 3?

Answer rating: 100% (QA)

To calculate the level of inventory at the end of Year 3 we need to use the inventory turnover ratio ... View the full answer