Question: Lusons manager is quite concerned about its inventory turnover and would like to improve the turnover. The following is the financial information for the past

Luson€™s manager is quite concerned about its inventory turnover and would like to improve the turnover. The following is the financial information for the past two years:

Luson€™s financial objective is to continue with the same growth rate in sales for 2015. Its cost of goods sold is 60% 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 Luson wants to increase inventory turnover to 5.5 times, what should the inventory be?

Sales Inventory 2013 $360,000 42,500 2014 $378,000 33,100

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