Question
Wawa Food Markets is a convenience store chain located primarily in the Northeast. The company sells gas, candy bars, drinks, and other grocery-related items. St.
Wawa Food Markets is a convenience store chain located primarily in the Northeast. The company sells gas, candy bars, drinks, and other grocery-related items. St. Jude Medical Incorporated sells medical devices related to cardiovascular needs. Suppose a local Wawa Food Market and St. Jude sales office report the following amounts in the same year (company names are disguised):
| Company 1 | Company 2 | |
|---|---|---|
| Net sales | $350,000 | $350,000 |
| Cost of goods sold | 135,000 | 285,000 |
| Gross profit | $215,000 | $65,000 |
| Average inventory | $35,000 | $25,000 |
Required:
1. For Company 1 and Company 2, calculate the inventory turnover ratio.
| |||||||||||||||||||||||||
2. For Company 1 and Company 2, calculate the gross profit ratio.
| |||||||||||||||||||||||||
3. After comparing the inventory turnover ratios and gross profit ratios, which company do you think is Wawa?
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
Ethical Issues In Business A Philosophical Approach
Authors: Thomas Donaldson, Patricia H. Werhane, Margaret Cording
7th Edition
0130923877, 978-0130923875
