Danaher Corporation manufactures a variety of products, including electronic measurement instruments and network communications products, water quality
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How well did Danaher manage its inventories over the three-year period?
Danaher Corporation (S in millions) 2012 2013 2014 Sales Cost of goods sold Average inventory Selected performance measures: $18,260.4 8,846.1 1,797.4 $19 118.0 9,160.4 1,798.5 $19,913.8 9,471.3 1,807.5 Gross profit (%) Inventory turnover ratio 5 1.6% 4.92 521 % 5.09 52.4% 5.24
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Danahers inventory turnover ratio improved from 2012 to 2014 Inventor...View the full answer
Financial Reporting and Analysis
ISBN: 978-1259722653
7th edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
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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