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:

Entry Barriers

Obstacles that prevent or hinder new competitors from easily entering an industry or area of business.

Total Profit

The financial gain obtained by subtracting total expenses from total revenue generated from sales or operations.

MR

Marginal Revenue, the additional income that an organization earns by selling one more unit of a product or service.

MC

Marginal Cost; the additional cost incurred from producing one more unit of a good or service.