Sparky's
Sparky's Sells Auto Parts -Using Sparky's Financial Information What Is the Company's Inventory Turnover

question 5

Multiple Choice

Sparky's
Sparky's sells auto parts.Provided below is selected financial information from the company's 2012 annual report:
$\begin{array} { l r r } \text { Fiscalyear end } & 2012 & 2011 \\\text { (amounts in thousands of dollars) } & & \\\text { Net sales } & \$ 125,410 & \$ 106,380 \\\text { Cast of Goods Sold } & - 104,090 & - 8 9 , 3 5 5 \\\text { Grass Prafit } & \$ 21,320 & \$ 17,021 \\\text { Irventory } & \$ 31,353 & \$ 30,850\end{array}$
-Using Sparky's financial information what is the company's inventory turnover ratio for 2012?

• A) 0.69
• B) 1.00
• C) 3.35
• D) 4.03

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Definitions:

Cash Flows

The total amount of money being transferred into and out of a business, especially affecting its liquidity.

Financial Lease

A financial lease is a lease in which the lessee has substantially all the risks and rewards incidental to ownership of the leased asset, often with an option to purchase the asset at the end of the lease term.

Capital Lease

A lease classified as a purchase by the lessee, obligating them to record the leased asset as an owned asset in their financial statements.

Partially Amortized

A loan repayment plan where the total sum borrowed is not fully paid off by the end of the loan term, leaving a lump sum due as a "balloon payment."