#5: If Sequoia achieves its Pro Forma forecast, how much inventory should be held to achieve a corporate inventory turnover of 8.000?

Any investment in improving, and this includes whatever we have to do to reduce inventory, MUST be paid back from the resulting cost savings within one year. Do not include any of the funds we will recover by converting inventory into cash, but DO include the savings resulting from lower annual inventory carrying costs.

#6: What is the maximum amount Sequoia should spend to improve corporate turnover to 8.000? (To answer this question, solve for the current inventory carrying cost minus the carrying cost if improving inventory turnover to 8. Note, the current inventory carrying cost is 32.4%)

Table One: Last Year's Balance Sheet and Income Statement for Sequoia Distributing Balance Sheet $1,573,180 Cash $6,844,260 Accounts Receivables $5,329,830 Inventory $6,020,950 Accounts Payable Income Statement $36,491,330 Sales Revenue $32,352,920 Cost of Goods Sold $3,388,410 Net Income Table Three: Pro Forma Balance Sheet and Income Statement for Sequoia Distributing Balance Sheet September 30 $1,730,498 Cash $7,528,686 Accounts Receivables $6,623,045 Accounts Payable Income Statement October 1 through September 30 $40,140,463 Sales Revenue $35,588,212 Cost of Goods Sold $3,764,751 Net Income