This information is available for the European Division of World Building Products Ltd for 2015. World Building

Question:

This information is available for the European Division of World Building Products Ltd for 2015. World Building Products uses the FIFO inventory method.

Required

(a) Calculate inventory turnover, days in inventory, and current ratio for World Building Products for 2015.

(b) What do inventory turnover and days in inventory indicate?

(c) If an organisation has high inventory turnover or low days in inventory, is it considered a good or a bad sign? Explain your answer.

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Step by Step Answer:

Related Book For book-img-for-question

Financial Accounting Reporting Analysis And Decision Making

ISBN: 9780730313748

5th Edition

Authors: Shirley Carlon, Rosina Mladenovic Mcalpine, Chrisann Palm, Lorena Mitrione, Ngaire Kirk, Lily Wong

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Question Posted: Sep 08, 2022 01:45 AM

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This information is available for the European Division of World Building Products Ltd for 2015. World Building

Question:

(in millions) Beginning inventory Ending inventory Current assets Current liabilities Cost of sales Sales 2015 $ 31 465.20 31 738.20 115 343.80 124 295.60 306 729.80 365 125.80

Step by Step Answer:

a Calculate inventory turnover days in inventory and current ratio for World Building Products for 2...View the full answer

Financial Accounting Reporting Analysis And Decision Making

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