Question

Taiping’s owner thinks he manages his inventory quite well. However, his accountant advises him that the industry average of inventory turnover is 9 times. The following is the financial information for the past two years:
Taiping's financial objective is to continue with the same growth rate in sales for 2015. Its cost of goods sold is 70% of the sales.
Requirements
1. What is the inventory turnover for 2014?
2. What are the projected sales in 2015?
3. With the projected growth in sales in 2015, if Taiping wants to increase inventory turnover to 9 times, what should the inventory be?


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  • CreatedJuly 08, 2015
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