Financial statement data for years ending December 31 for Tango Company follows: a. Determine the inventory turnover
Question:
a. Determine the inventory turnover for 2016 and 2015.
b. Determine the number of days' sales in inventory for 2016 and 2015. Use 365 days and round to one decimal place.
c. Does the change in inventory turnover and the number of days' sales in inventory from 2015 to 2016 indicate a favorable or an unfavorable trend?
2016 2015 $3,864,000 $4,001,500 Inventories: Beginning of year End of year 770,000 840,000 740,000 770,000
Step by Step Answer:
a b c The decrease in the inventory turnover from 53 to 48 and the increase in the number o...View the full answer
Accounting
ISBN: 978-1285743615
26th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
Related Video
Inventory turnover is a key metric that helps businesses evaluate the efficiency of their operations. A high turnover ratio is generally considered positive, indicating that the company is effectively selling its inventory and making efficient use of its resources. On the other hand, a low turnover ratio may indicate issues such as overstocking or slow sales and may require further examination to identify and address the underlying causes. Businesses use this ratio to make decisions about inventory levels, production schedules, and pricing strategies. It also helps businesses to identify areas where they may need to make improvements, such as reducing lead times for production or optimizing sales and marketing efforts. Additionally, inventory turnover is used by investors and analysts as a key performance indicator to evaluate the financial health and growth potential of a company.
Students also viewed these Accounting questions
-
Financial statement data for years ending December 31 for Tango Company follow: _____________________________ 20Y7 __________________ 20Y6 Cost of merchandise sold ......... $3,864,000...
-
The following financial statement data for years ending December 31 for Tango Company are shown below. a. Determine the inventory turnover for 2014 and 2013. b. Determine the number of days sales in...
-
The following financial statement data for years ending December 31 for Gillispie Company are shown below. a. Determine inventory turnover for 2012 and 2011. b. Determine the number of days sales in...
-
A compound with molecular formula C 17 H 36 exhibits a 1 H NMR spectrum with only one signal. How many signals would you expect in the 13C NMR spectrum of this compound?
-
The following data were taken from recent annual reports of Interstate Bakeries Corporation (IBC). Interstate Bakeries produces, distributes, and sells fresh bakery products nationwide through...
-
Do the inertia and mass of the system increase, decrease, or remain the same when (a) an elementary particle is accelerated (system: particle) and (b) an elementary particle slams into a metal target...
-
Tom Robinson is thinking about buying a portable computer. He has a computer at home, but the portable computer would allow him to work during his frequent business trips. Tom is trying to convince...
-
Triumph Trophies makes trophies and plaques and operates at capacity. Triumph does large custom orders, such as the participant trophies for the Minnetonka Little League. The controller has asked you...
-
Last January, Abby started a new business named Abby's Blinds, Curtains, & Dining Essentials, or ABC&DE for short. In her business, Abby, who has always loved arts and crafts, designs unique i...
-
The Milk 4 All Company is considering branching into the ice-cream business. It will need a machine costing $1,000,000 to produce the ice cream. The machine will be depreciated over ten years to zero...
-
Financial statement data for years ending December 31 for Holland Company follows: a. Determine the inventory turnover for 2016 and 2015. b. Determine the number of days' sales in inventory for 2016...
-
During 2016, the accountant discovered that the physical inventory at the end of 2015 had been understated by $42,750. Instead of correcting the error, however, the accountant assumed that the error...
-
What are three key components of the definition of a liability?
-
Say you think interest rates on 10-year bonds will decline by 2%. You have $1 million and there are two bonds you can buy: A B Coupon 10% 3% Years to Maturity 10 10 Yield to Maturity 7% 7% Price...
-
A university class has 22 students: 3 are accounting majors, 9 are art majors, and 10 are history majors. (Each student has only one of these majors.) The professor is planning to select two of the...
-
Consider the market for gasoline in Calgary. Units of quantity and price are in thousands of litres and $/litre, respectively. Letting ???? denote the price, suppose the quantity demanded of...
-
Evaluate the efficacy of servant leadership paradigms in nurturing a culture of empowerment, accountability, and continuous learning, and their consequential impact on organizational agility and...
-
0/5 A spinner has 20 equally sized sections, 16 of which are yellow and 4 of which are blue. The spinner is spun and, at the same time, a fair coin is tossed. What is the probability that the spinner...
-
Oil Products Company purchases an oil tanker depot on January 1, 2014, at a cost of $600,000. Oil Products expects to operate the depot for 10 years, at which time it is legally required to dismantle...
-
Coastal Refining Company operates a refinery with a distillation capacity of 12,000 barrels per day. As a new member of Coastal's management team, you have been given the task of developing a...
-
The inventory at the end of the year was understated by $23,950. (a) Did the error cause an overstatement or an understatement of the gross profit for the year? (b) Which items on the balance sheet...
-
X-mas Co. sold merchandise to Mistletoe Company on October 31, FOB shipping point. If the merchandise is in transit on October 31, the end of the fiscal year, which company would report it in its...
-
A manufacturer shipped merchandise to a retailer on a consignment basis. If the merchandise is unsold at the end of the period, in whose inventory should the merchandise be included?
-
Local Manufacturing looks back at the previous year and finds that they processed a total of 1,000 applicants to hire 50, which is 5 percent. This statistic reflects a(an): Group of answer choices HR...
-
Organizational performance practices that result in employees having the skills necessary to do their jobs, increased employee m dynamics within the organization are referred to as O resource-based...
-
Making optimal decisions "at the margin" requires OA. making decisions according to one's whims and fancies. OB. weighing the costs and benefits of a decision before deciding if it should be pursued....
Study smarter with the SolutionInn App