End inventory level and inventory turnover ratio

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Reference no: EM131305113

Charlie's Cycles Inc. Has $110 million in sales. The company expects that its sales will increase 5% this year. Charlie'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) are as follows:

Inventories = $9 + 0.0875(Sales)

Given the estimated sales forecast and the estimated relatioinship between inventories and slaes, what are your forecasts of the company's year-end inventory level and its inventory turnover ratio?

Reference no: EM131305113

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