Key figures for Samsung follow. Required 1. Compute Samsung?s (a) inventory turnover and (b) days? sales in
Question:
Key figures for Samsung follow.
Required1. Compute Samsung?s (a) inventory turnover and (b) days? sales in inventory for the most recent two years.2. Is Samsung?s inventory turnover on a favorable or unfavorable trend?3. In the current year, does Samsung?s inventory turnover underperform or outperform the industry (assumed) average of 15?
W millions Current Year Two Years Prior One Year Prior W 18,811,794 W 24,983,355 129,290,661 Inventory.. Cost of sales.. W 18,353,503 120,277,715 123,482,118
Step by Step Answer:
1 2 Unfavorable Explanation Samsungs inventory turnover is on an unfavorable tren...View the full answer
Financial and Managerial Accounting
ISBN: 978-1260247855
8th edition
Authors: John J Wild, Ken W. Shaw
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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