Selected data from recent financial statements of The Procter & Gamble Company, CVS Health Corporation, and Valero
Question:
Selected data from recent financial statements of The Procter & Gamble Company, CVS Health Corporation, and Valero Energy Corporation are presented below:
a. Compute the asset turnover (AT) ratio for each company.
b. Compute the accounts receivable turnover (ART), inventory turnover (INVT), and PP&E turnover (PPET) for each company.
c. Discuss any differences across these three companies in the turnover ratios computed in a and b.
(3 millions) Procter & Gamble CVS Health Valero Energy Sales..... Cost of sales. Average receivables.. Average inventories. Average PP&E.... Average total assets. S66,832 $184,765 156,208 S88.407 81,926 33,449 4.640 12,673 6,296 4,681 15,028 6,047 20.247 10,234 26,976 66,119 94,797 48.166 .... ..
Step by Step Answer:
a b c For all three companies these ratios reflect differences in their businesses and the overal...View the full answer
Financial Accounting
ISBN: 9781618533111
6th Edition
Authors: Michelle L. Hanlon, Robert P. Magee, Glenn M. Pfeiffer, Thomas R. Dyckman
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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