Polaris Industries is forecasting its financial statements for Year 6. Selected financial information for Years 5 and 6 is provided in the table. What is the forecasted Cost of Goods Sold in Year 3? Selected Financial Information
Polaris Industries Inc. ($000s)
$$\begin{array} { | c | c | c | }
\hline & \text { Year 5 } & \text { Forecast Year 6 } \
\hline \text { Sales } & \$ 1,908,459 & \$ 1,803,493 \
\hline \text { COGS } & 1,454,374 & \
\hline
\end{array}$$

Question

Polaris Industries is forecasting its financial statements for Year 6. Selected financial information for Years 5 and 6 is provided in the table. What is the forecasted Cost of Goods Sold in Year 3? Selected Financial Information
Polaris Industries Inc. ($000s)
$$\begin{array} { | c | c | c | } 
\hline & \text { Year 5 } & \text { Forecast Year 6 } \
\hline \text { Sales } & \$ 1,908,459 & \$ 1,803,493 \
\hline \text { COGS } & 1,454,374 & \
\hline
\end{array}$$

Quizplus · Accepted Answer

The forecasted COGS for Year 6 can be calculated by finding the COGS to Sales ratio for Year 5 and applying it to the forecasted sales for Year 6. The COGS to Sales ratio for Year 5 is 1,454,374 / 1,908,459 = 0.7619. Applying this ratio to Year 6 sales: 0.7619 * 1,803,493 = 1,374,383.

Polaris Industries Is Forecasting Its Financial Statements for Year 6