?Glad Rags, Inc. sells women\'s clothes. Below is selected financial statement i

Question

?Glad Rags, Inc. sells women's clothes. Below is selected financial statement information:

Glad Rags, Inc. projects that sales will grow at a compound rate of 7% per year for years 2017 through 2019 and that the cost of goods sold to sales percentage will equal that realized in 2016.

Question: Compute the forecast Net Sales for 2019?

Glad Rags, Inc. Selected Financial Statement data Fiscal year end (amounts in thousands of dollars) Net sales Cost of Goods Sold Gross profit 2016 2015 $47,895$42,589 (35,952) (32,588) $11,943 $10,001 Inventory $ 5,548$4,948

Explanation / Answer

Net sales in 2017=47895*1.07
Net sales in 2018=47895*1.07*1.07
Net sales in 2019=47895*1.07*1.07*1.07=58673.43449

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