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Wilkins Manufacturing has sales of $3.5 million and a gross profit margin of 44%. Its end-of-quarter inventories are: Quarter 1 2 3 4 Inventory $410,000
Wilkins Manufacturing has sales of $3.5 million and a gross profit margin of 44%. Its end-of-quarter inventories are:
Quarter
1 2 3 4
Inventory
$410,000 790,000 1,207,000 201,000
a. Find the average quarterly inventory and use it to calculate the firms inventory turnover and the average age of inventory. (Assume a 365-day year.)
b. Assuming that the company is in an industry with an average inventory turnover of 1.4, how would you evaluate the activity of Wilkins inventory?
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Small Business Management Launching and Growing New Ventures
Authors: Justin Longenecker, Leo Donlevy, Terri Champion, William Petty, Leslie Palich, Frank Hoy
6th Canadian edition
176532218, 978-0176532215
