Home Insert Draw Page Layout Data Review Share Com Paste Font Number Cells Editing Analyze Data Sensitivity B38 Formulas View Tell me A. % conditional Formatting 2 Format as Table Alignment Cell Styles fx This is a more conservative measure of liquidity than the Current Ratio because this ratio focuses on the firm's more liquid as Cost of goods sold divided by inventory. This shows how many times the inventory of a firm is sold and replaced during an accounting period. Larger values are preferred. When compared to an industry average, a low tumover tends to indicate that the company is carrying excess inventory, an unhealthy sign because excess inventory represents an investment with a low rate of return. Over time, a consistent drop in inventory turnover indicates the lack of an effective sales strategy or poor selections in buying. Decreasing values have a negative effect on cash flow. (This ratio is calculated as sales divided by inventory by financial analysts such as Dunn & Bradstreet. Thus, the formula should be identified before comparing performance across firms (Also known as Inventory Utilization Ratio). The COGS-based calculation is preferable. Inventory Turnover 59.98 60.47 70.00 52.57 52.57 60.00 50.00 40.00 30.00 20.00 10.00 0.00 JJ) 24.31 13.70 11.90 11.90 Inventory Tumover (COGS) 2018 2019 Plan Industry w Inventory Tumover (COGS) w Inventory Tumover (sales) Q3. Based on the Inventory Turn Rate a. Inventory Tumover is fine (better than average) and improving (indicating an effective sales strategy). b. Inventory Tumover is not fine (worse than average) but improving (indicating an effective sales strategy). c. Inventory Turnover is currently fine (better than average) but declining (indicating an ineffective sales strategy). d. Inventory Turnover is not currently fine (worse than average) and declining (indicating an ineffective sales strategy). Breakeven Performance Structure Economic Profit Planning Sheet Economic Profit Plan