Why should I choose AnalystNotes?

AnalystNotes specializes in helping candidates pass. Period.

Basic Question 9 of 10

To project future inventory, an analyst can assume an inventory turnover rate and combine it with projected:

A. sales.
B. COGS.
C. operating income.

User Contributed Comments 2

User Comment
tpraturi Inventory Turnover Rate = COGS / Average Inventory
davidt876 good point tpraturi!

so if you're modelling ending inventory (EI) when we know beginning inventory (BI) and the average historical turnover rate:

average inventory = COGS / inventory turnover rate
(EI+BI)/2 = COGS / inventory turnover rate
EI + BI = (COGS / inventory rate) * 2

EI = ((COGS / inventory rate) * 2) - BI
You need to log in first to add your comment.
Thanks again for your wonderful site ... it definitely made the difference.
Craig Baugh

Craig Baugh

Learning Outcome Statements

demonstrate the development of a sales-based pro forma company model

CFA® 2025 Level I Curriculum, Volume 3, Module 12.