Question
McDonald's Corporation, a global fast-food restaurant chain, reported cost of goods sold (COGS) of $2,000,000 and average inventory of $500,000 for the year 2023. Calculate
McDonald's Corporation, a global fast-food restaurant chain, reported cost of goods sold (COGS) of $2,000,000 and average inventory of $500,000 for the year 2023. Calculate the inventory turnover ratio for McDonald's Corporation in 2023. Inventory turnover measures how efficiently a company manages its inventory by assessing the frequency with which it sells and replaces its inventory during a specific period. Provide a comprehensive breakdown of the inventory turnover ratio calculation, including the formula used, and discuss the implications of the calculated ratio figure for McDonald's operational efficiency and inventory management practices. Analyze how changes in COGS and inventory levels can impact the inventory turnover ratio and evaluate McDonald's ability to optimize its inventory turnover to minimize holding costs and maximize profitability.
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