Sparky's
Sparky's Sells Auto Parts -Sparky's Forecasts That Sales Will Grow by 25% in 2013

question 36

Multiple Choice

Sparky's
Sparky's sells auto parts.Provided below is selected financial information from the company's 2012 annual report:
$\begin{array} { l r r } \text { Fiscalyear end } & 2012 & 2011 \\\text { (amounts in thousands of dollars) } & & \\\text { Net sales } & \$ 125,410 & \$ 106,380 \\\text { Cast of Goods Sold } & - 104,090 & - 8 9 , 3 5 5 \\\text { Grass Prafit } & \$ 21,320 & \$ 17,021 \\\text { Irventory } & \$ 31,353 & \$ 30,850\end{array}$
-Sparky's forecasts that sales will grow by 25% in 2013 and that its cost of goods sold to sales ratio will be the same in 2013 as it was in 2012.If these assumptions prove correct and Sparky's inventory turnover ratio for 2013 is 4.5 what will be the level of inventory at the end of 2013?

• A) $31,353
• B) $26,475
• C) $40,000
• D) $42,314

---

Definitions:

Richest 1 Percent

The segment of the population that holds a disproportionally large share of a country's wealth, often used in discussions on inequality.

World Population

The total number of humans currently living on Earth, often estimated and analyzed for trends in growth, distribution, and demographic changes.

Earnings

Earnings represent the amount of money that an individual or company receives in return for labor, services, or investment, often measured over a specific period.

Gini Index

A measure of the distribution of income across a population, used to gauge inequality.