A company reports the following: Cost of goods sold ......$880,000 Average inventory ......110,000 Determine (a) The inventory
Question:
Cost of goods sold ......$880,000
Average inventory ......110,000
Determine
(a) The inventory turnover and
(b) The number of days’ sales in inventory.
Round to one decimal place.
Step by Step Answer:
a Inventory Turnover Cost of Goods Sold Average Inventory Invento...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.
Students also viewed these Managerial Accounting questions
-
Inventory turnover is calculated as cost of goods sold divided by ending inventory . 1. True 2. False
-
A company reports the following information from its financial statements: Required Conduct horizontal and vertical analyses of inventory for the current year. Round percentages to one decimal point...
-
A company reports the following for accounts receivable: Required For each year, determine the company's total or gross accounts receivable, net realizable value of accounts receivable, and allowance...
-
For the Somerset furniture Company described in Case Problem 10.1 in Chapter 10, determine the product lead time by developing a time line from the initiation of a purchase order to product delivery....
-
Swimtech Pools Inc. (SPI) reported the following in its financial statements for the quarter ended March 31, 2013. December 31, 2012 March 31, 2013 Common Stock, $1 par, 50,000 shares outstanding...
-
Find the area of the regions bounded by the following curves. The lemniscate r 2 = 6 sin 2
-
How are interest rates and the rate of return stated?
-
Digital World is a retail store that sells cameras and photography supplies. The firm's credit purchases and purchases returns and allowances transactions for June 2016 appear below, along with the...
-
The following questions needs to be done with the help of case study below: Mike, a recent college graduate, opened a chequing account with a local bank. He asked numerous questions before deciding...
-
The Indian Spirit Company is operating with two divisions. Division H is producing a product line that is required as a component part of the product being manufactured by Division W. For Division H,...
-
A company reports the following: Net sales ..............$700,000 Average accounts receivable (net) .....50,000 Determine (a) The accounts receivable turnover and (b) The number of days sales in...
-
A company reports the following: Cost of goods sold ....$360,000 Average inventory ......50,000 Determine (a) The inventory turnover and (b) The number of days sales in inventory. Round to one...
-
Search.com is an Internet-based dating agency. Its business model is that anyone can search its website and review for free the profiles of people looking for friends or partners, but if anyone wants...
-
What kinds of provisions do couples typically include in a prenuptial agreement?
-
Under PKPA, when can a state modify the decree of another state?
-
What direction are courts moving in with respect to reviewing premarital contracts? What considerations underlie this shift?
-
Under PKPA, at what point does the continuing jurisdiction of the decree state terminate?
-
How are the two concepts interrelated?
-
A store manager observes Lucy Grabit stuffing a pair of nylon hose into her purse before going through the checkout counter in a supermarket. The manager detains her and promptly directs his employee...
-
One study found that the elderly who do not have children dissave at about the same rate as the elderly who do have children. What might this finding imply about the reason the elderly do not dissave...
-
Write a symbolic statement for each circuit shown in Problems 1015. P on off 010
-
What are the usual characteristics of preferred stock?
-
What are the two basic sources of stockholders equity? Explain each.
-
Owners equity is accounted for by source. What does source mean?
-
What does the PPBES budget development system take into account? Planning, Programming, Budgeting, and Evaluation System Preparing, Programming, Budgeting, and Evaluation System Planning,...
-
Mary, a college student, needs to borrow $8,000 today for her tuition. She agrees to pay back the loan in a lump-sum payment upon graduating, 4 years from today. The lender agrees to lending at a...
-
All questions, if not otherwise specified, are based on the following information. A fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term bond fund,...
Study smarter with the SolutionInn App