Financial Accounting (5th Edition)

Chapter 6

The Buckle, Inc. R1. For the most recent, what is the amount of the inventory in the balance sheet? What does amount represent?

R2. Buckle refers to its cost of goods sold using a different name. What is it?

R3. For the most recent year, what is the amount of cost of goods sold in the income statement? What does this amount refer?

R4. Calculate Buckles inventory turnover ratio and average days in inventory for the most recent years. Inventory turnover ratio = Cost of goods sold Average inventory

Average days in inventory =

365

Inventory turnover ratio

4

R5. Calculate Buckles gross profit ratio for each of the three years. Do you notice any trend?

Gross profit ratio =

Gross profit Net sales

R6. For the most recent year, calculate Buckles ratio of operating expenses to sales. Operating expenses Net sales