7 (7/15)

Presented are the income statements of Knopf and Simon Publications companies for the current year:

	Knopf		Simon
Net sales revenue	$487,000	100.00%	$500,000	100.00%
COGS	400,000	82.14%	395,000	79.00%
Gross Profit	87,000	17.86%	105,000	21.00%
Selling/Gen Expenses	30,000	6.16%	50,000	10.00%
Income from operations	57,000	11.70%	55,000	11.00%
Income tax expense	17,100	3.51%	16,500	3.30%
Net Income	$39,900	8.19%	$38,500	7.70%

Which company has the best inventory turnover rate?

A.

Both have the same rate

B.

Impossible to determine

C.

Simon

D.

Knopf