Question
Payless ShoeSource and Dillards both offer mens formal footwear. Payless offers lower- to middle-priced footwear, whereas Dillards offers more specialized, higher-end footwear. The average price
Payless ShoeSource and Dillards both offer mens formal footwear. Payless offers lower- to middle-priced footwear, whereas Dillards offers more specialized, higher-end footwear. The average price for a pair of shoes in Payless may be about $50, whereas the average price in Dillards may be about $175. The types of shoes offered by Dillards are not sold by many other stores. Suppose a Payless store and a Dillards store report the following amounts for mens shoes in the same year (company names are disguised):
Company 1 | Company 2 | |
Net sales | $200,000 | $200,000 |
Cost of goods sold | 130,000 | 165,000 |
Gross profit | $70,000 | $ 35,000 |
Average inventory | $ 35,000 | $ 20,000 |
1. | For Company 1 and Company 2, calculate the inventory turnover ratio.
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started