Fairchild Garden Supply expects $740 million of sales this year, and it forecasts a 20% increase for next year. The CFO uses this equatioto forecast inventory requirements at different levels of sales: Inventories = $30.2 +0.25(Sales). All dollars are in millions. The firm'scost of goods sold is expected to be 75% of sales. What is the projected inventory turnover ratio for the coming year? Do not roundintermediate calculations.a. 2.20 timesb. 3.52 timesc. 2.64 timesd. 2.93 timese. 3.09 timesOO

Inventory turnover ratio is one of the efficiency ratios used in business. This shows how…

Fairchild Garden Supply expects $740 million of sales this year, and it forecasts a 20% increase for next year. The CFO uses t o forecast inventory requirements at different levels of sales: Inventories= $30.2 +0.25(Sales). All dollars are in millions. T cost of goods sold is expected to be 75% of sales. What is the projected inventory turnover ratio for the coming year? Do not m intermediate calculations. O a. 2.20 times Ob. 3.52 times O c. 2.64 times O d. 2.93 times O e. 3.09 times

Fairchild Garden Supply expects $740 million of sales this year, and it forecasts a 20% increase for next year. The CFO uses t o forecast inventory requirements at different levels of sales: Inventories= $30.2 +0.25(Sales). All dollars are in millions. T cost of goods sold is expected to be 75% of sales. What is the projected inventory turnover ratio for the coming year? Do not m intermediate calculations. O a. 2.20 times Ob. 3.52 times O c. 2.64 times O d. 2.93 times O e. 3.09 times

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Last year Delightful Desserts had a quick ratio of 2.2, a current ratio of 5.0, an inventory turnover of 8, total current assets of $285,000, and cash and equivalents of $36,000. If the cost of goods sold equaled 80 percent of sales, what were Bailey's annual sales and days' sales outstanding (DSO)? Assume there are 360 days in a year. Round your answer for annual sales to the nearest dollar and answer for DSO to one decimal place. Annual sales: $ DSO:
QUESTION 5 A). What are inventories? Why are they important to manufacturing companies? B). What is the difference between FIFO and LIFO? C). Given the following data, calculate a level production plan, quarterly ending inventory, and average quarterly inventory. If inventory carrying costs are $6 per unit per quarter, what is the annual carrying cost? Opening and ending inventory are zero. Quarter 1 Quarter 2| Quarter 3 Quarter 4 Totals $ Forecast Demand 5000 7000 8500 9500 Production Ending Inventory Average Inventory Inventory Cost If the company always carries 100 units of safety stock, what is the annual cost of carrying it? D) Perform an ABC analysis on the following set of products. Annual Item Demand Unit Cost A211 800 $9 B390 100 $90 C003 450 $6 D100 400 $100 E707 85 $2,000 F660 250 $320 G473 500 $75 H921 100 $75
Suppose a company's cost of goods sold for years 2 and 3 were $283,310 and $299,390 respectively. Also suppose that inventory had a balance of $34,740 at the end of year 1, $35,168 at the end of year 2, and $36,356 at the end of year 3. If the annual growth in total revenues is 8.42% for the foreseeable future, calculate the forecasted inventory balance at the end of year 5. Assume the same inventory turnover in all future years as that in year 3 calculated using the average asset balances. Also assume the same gross margin % in all future years as that in year 3. Note that year 3 is the latest year with reported results, while years 4 onwards are all forecasted years.
3. Covid Co. has the following monthly sales in 2020: Sales (000 units) Month Sales (000 units) Month January 567 July 522 February 231 August 752 March 610 September 645 April 309 October 229 May 736 November 456 June 380 December 700 a. Plot the monthly data. b. Forecast September sales volume using the following: 1) A linear regression 2) A 6-month moving average 3) Exponential smoothing with a smoothing constant equal to 0.20 and assuming a March forecast of 600,000. 4) The naïve approach 5) A weighted average using 0.7 for Dec, 0.2 for November and 0.1 for October. 6) Correlation c. Which method in b) is the MOST appropriate method to be used? Why?
The Bandon Pine Corporation's purchases from suppliers in a quarter are equal to 70 percent of the next quarter's forecast sales. The payables period is 60 days. Wages, taxes, and other expenses are 15 percent of sales, and interest and dividends are $95 per quarter. No capital expenditures are planned. Projected quarterly sales are shown here: Q1 Q2 Q3 Q4 Sales $2,130 $2,430 $2,130 $1,830 Sales for the first quarter of the following year are projected at $2,460. Calculate the company's cash outlays by completing the following: (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Payment of accounts Wages, taxes, other expenses Long-term financing expenses (interest and dividends) Total X Answer is complete but not entirely correct. $ $ Q1 1,491.00 $ 319.50 95.00 2,122.50 $ Q2 1,561.00 $ 364.50 95.00 2,020.50 $ Q3 1,351.00 $ 319.50 95.00 1,765.50 $ Q4 1,575.00 X 274.50 95.00 1,994.50 x
Suppose a firm has had the following historic sales figures. Year: 2016 2017 2018 2019 2020 Sales $1,500,000 $1,670,000 $1,580,000 $2,160,000 $1,890,000 What would be the forecast for next year's sales using FORECAST.ETS to estimate a trend? Note: Round your answer to the nearest whole dollar. Next year's sales
Jace Furnishings has $325 million in sales. The company expects that its sales will increase 8% this year. Jace's CFO uses a simple linear regression to forecast the company's inventory level for a given level of projected sales. On the basis of recent history, the estimated relationship between inventories and sales (in millions of dollars) is as follows: Inventories = $30 + 0.105(Sales) Given the estimated sales forecast and the estimated relationship between inventories and sales, what are your forecasts of the company's year-end inventory level? Write out your answer completely. For example, 5 million should be entered as 5,000,000. Do not round intermediate calculations. Round your answer to the nearest dollar.$ What are your forecasts of the company's year-end inventory turnover ratio? Do not round intermediate calculations. Round your answer to two decimal places. x
The Bandon Pine Corporation's purchases from suppliers in a quarter are equal to 60 percent of the next quarter's forecast sales. The payables period is 60 days. Wages, taxes, and other expenses are 25 percent of sales and interest and dividends are $95 per quarter. No capital expenditures are planned. Here are the projected quarterly sales: Q1 az 03 Q4 Sales $1,860 $2,160 $1,860 $1,560 Sales for the first quarter of the following year are projected at $2,190. Calculate the company's cash outleys by completing the following: (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Payment of accounts Wages, taxes, other expenses Long-term financing expenses (interest and dividends) Q1 Q2 Q3 Q4
Dodge Ball Bearings had sales of 14,000 units at $70 per unit last year. The marketing manager projects a 15 percent increase in unit volume sales this year with a 10 percent price decrease (due to a price reduction by a competitor). Returned merchandise will represent 10 percent of total sales. What is your net dollar sales projection for this year? Net sales
Here are next year's projections for a firm you are valuing: Sales are expected to be $100 million. Gross margin is forecasted to be 50%. COGS and SG&A together are $90 million, of which depreciation is $10 million. Industrial customers (60% of sales) will take 100 days to pay their bills. Retail chains (40% of sales) make cash sales. The firm expects to turn over its inventory every 60 days. The firm will pay its bills in 20 days. Using the information provided above, What is next year’s inventory projected to be? [ Select ] What should be the average collection period (days) and next year’s accounts receivable? [ Select ]
Q5./Suppose that the demand for a product is 10000 per year and the items are withdrawn uniformly. The order cost is 1000$ and the inventory holding cost 6$ per item per year. If shortages cost 5$ per item per year. Find: 1. The economic order quantity 2. Maximum inventory (I Max) 3. The number of ordering during the year (Order frequency) 4. The interval between two orders
Zain glassware has made the forecast of sales shown in the following table. Also given is the probability of each level of sales. Sales Probability Rs. 200,000 .20 300,000 .60 400,000 .20 The firm has fixed operating costs of Rs. 75,000 and variable operating costs equal to the 70% level of sales. The company pays Rs. 12,000 in interest per period. The tax rate is 40%. Compute the earnings before interest and taxes (EBIT) for each level of sales. Compute the earnings per share (EPS) for each level of sales, the expected EPS, the standard deviation of the EPS and the coefficient of variation of EPS, assuming that there are 10,000 shares of common stock outstanding. Zain glassware has the opportunity to reduce its leverage to zero and pay no interest. This will require that the number of shares of common stock outstanding be increased to 15,000. Repeat (b) under this assumption. Compare your findings in (b) and (c) and comment on the reduction…

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