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Inventory Turnover and days' sales in inventory Kracker Corp., Foodstuff, Inc., and Winston Stores, Inc. are three grocery chains in the United States. Inventory management
Inventory Turnover and days' sales in inventory Kracker Corp., Foodstuff, Inc., and Winston Stores, Inc. are three grocery chains in the United States. Inventory management is an important aspect of the grocery retail business. Recent balance sheets for these three companies indicated the following merchandise inventory (in millions) information: Kracker Foodstuff Winston Corp. Inc. Stores Cost of merchandise sold $32,850.0 $33,215.0 $35,770.0 Inventory, beginning of year 1,908.9 2,042.0 1,514.1 Inventory, end of year 1,871.1 1,962.0 1,425.9 a. & b. Determine the inventory turnover and the number of days' sales in inventory (use 365 days and round to the nearest day) for the three companies. Round all interim calculations to one decimal place. For days' sales in inventory, round final answers to the nearest day, and for inventory turnover, round to one decimal place. Company names Inventory Turnover Days' Sales in Inventory Kracker days Foodstuff days Winston Stores days c. The inventory turnover ratios and days' sales in inventory are for Kracker and Foodstuff. Winston Stores has a inventory turnover and a days' sales in inventory than Kracker and Foodstuff. These results suggest that Kracker and Foodstuff are efficient than Winston Stores in managing inventory. d. If Kracker had Winston Stores' days' sales in inventory, how much additional cash flow would have been generated from the smaller inventory relative to its actual average inventory position? Round interim calculations to one decimal place and your final answer to the nearest million. $ million
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