a. Calculate the inventory turnover for 2020 for each company (round to two decimal places). b. Can
Question:
a. Calculate the inventory turnover for 2020 for each company (round to two decimal places).
b. Can you compare these companies? Explain.
c. Review the turnover for Fresh-Cut Flowers Inc. Does this result appear to be logical? Explain why or why not.
(millions of $) Custom Furniture Corp Furniture Retailers Fresh-cut Flowers Inc. Computer Inc. 2020 2019 2019 2019 2020 2020 2020 2019 $1,491 $1,009 $3,345 $2,270 $2,040 271 $2,685 22 $2,670 $1,770 174 Cost of goods sold. Inventory. 258 222 130 87
Step by Step Answer:
a Computer Inc Furniture Retailers FreshCut Flowers Inc Custom Furniture Co...View the full answer
Fundamental Accounting Principles Volume II
ISBN: 978-1260305838
16th Canadian edition
Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann
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.
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