Following are key figures (in millions of Korean won) for Samsung (www.Samsung.com), which is a leading manufacturer
Question:
Following are key figures (in millions of Korean won) for Samsung (www.Samsung.com), which is a leading manufacturer of consumer electronics products.
Required
1. Use these data and those from BTN 6-2 to compute (a) inventory turnover and (b) days’ sales in inventory for the most recent two years shown for Samsung, Apple, and Google.
2. Comment on and interpret your findings from part 1.
W in millions Current Year One Year Prior Two Years Prior Inventory Cost of sales w19,134,868 W17,747,41315.716,715 126,651.931 137,696,309 112,145,120
Step by Step Answer:
1 Computations for Apple and Google are in BTN 2 2 For the current year Apple has the highest invent...View the full answer
Fundamental Accounting Principles
ISBN: 978-0077862275
22nd edition
Authors: John Wild, Ken Shaw, Barbara Chiappetta
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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