Financial information for Bell and Gangway (two computer manufacturers) follows: Required a. Compare Bell and Gangway in
Question:
Financial information for Bell and Gangway (two computer manufacturers) follows:
Required
a. Compare Bell and Gangway in terms of their percentage changes in sales and gross margin.
b. Compare Bell and Gangway in terms of their gross margin percentages.
c. Compare Bell and Gangway in terms of inventory turnover and days’ sales in inventory
d. In your opinion, which firm has had better financial performance? Support your answer using your calculations in parts a, b, and c.
Bell Gangway Year Ended Year Ended Year Ended Year Ended (in millions) 12/31/2020 12/31/2019 12/31/2020 12/31/2019 Sales $61,133 $57,420 $8,922 $8,457 Cost of sales 49,462 47,904 7,316 6,951 Gross margin $11,671 $ 9,516 $1,606 $1,506 Inventory $ 1,180 $ 660 $ 400 $ 351
Step by Step Answer:
a Bell Gangway Percentage change in sales 65 55 Percentage change in gross margin 226 66 b Bell Gang...View the full answer
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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