The sales forecast , year ended inventory and the inventory turnover ratio. Introduction: Sales Forecast: Sales forecast is the important point that arises while making the future plans. The management generally takes 5 years financial records and then studies it and decides the amount of turnover for the current and upcoming years.

Question

Problem: Jasper Jewelry has $150 million in sales. The company expects that its sales will increase 4% this year. Jasper'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 = $10 + 0.07(Sales) Given the estimated sales forecast and the estimated relationship between inventories and sales, what is your forecast of the company's year-end inventory level? Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Do not round intermediate calculations. Round your answer to two decimal places.

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Question

Chapter 16, Problem 6P

Summary Introduction

To compute: The sales forecast, year ended inventory and the inventory turnover ratio.

Introduction:

Sales Forecast:

Sales forecast is the important point that arises while making the future plans. The management generally takes 5 years financial records and then studies it and decides the amount of turnover for the current and upcoming years.

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Problem: Jasper Jewelry has $150 million in sales. The company expects that its sales will increase 4% this year. Jasper'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 = $10 + 0.07(Sales) Given the estimated sales forecast and the estimated relationship between inventories and sales, what is your forecast of the company's year-end inventory level? Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Do not round intermediate calculations. Round your answer to two decimal places.

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Suppose a firm has had the following historic sales figures. Year: 2009 2010 2011 2012 2013 Sales $1,420,000 $1,720,000 $1,600,000 $2,010,000 $1,770,000 What would be the forecast for next year's sales using regression to estimate a trend? Next year's sales