Trademark Corp.s financial manager collected the following information for its peer group to compare its performance against
Question:
a. Explain how Trademark is doing relative to its peers.
b. How do the industry ratios help Trademarksmanagement?
Trademark Ratios DSO Total assets turnover Inventory turnover Quick ratio Peer Group 27.9 days 33.5 days 3.7 2.8 1.3 2.3 0.6
Step by Step Answer:
a One can see that Trademark is not doing as well as its competitors The turnov...View the full answer
Fundamentals of corporate finance
ISBN: 978-0470876442
2nd Edition
Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates
Related Video
Inventory turnover is a key metric that helps businesses evaluate the efficiency of their operations. A high turnover ratio is generally considered positive, indicating that the company is effectively selling its inventory and making efficient use of its resources. On the other hand, a low turnover ratio may indicate issues such as overstocking or slow sales and may require further examination to identify and address the underlying causes. Businesses use this ratio to make decisions about inventory levels, production schedules, and pricing strategies. It also helps businesses to identify areas where they may need to make improvements, such as reducing lead times for production or optimizing sales and marketing efforts. Additionally, inventory turnover is used by investors and analysts as a key performance indicator to evaluate the financial health and growth potential of a company.
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