Williams & Sons last year reported sales of $10 million and an inventory turnover ratio of 2.
Question:
Inventory Turnover Ratio
Inventory Turnover RatioThe inventory turnover ratio is a ratio of cost of goods sold to its average inventory. It is measured in times with respect to the cost of goods sold in a year normally. Inventory Turnover Ratio FormulaWhere,...
Step by Step Answer:
Sales 10000000 SI 2 Inventory S2 ...View the full answer
Corporate Finance A Focused Approach
ISBN: 978-1439078082
4th Edition
Authors: Michael C. Ehrhardt, Eugene F. Brigham
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.
Students also viewed these Corporate Finance questions
-
Williams & Sons last year reported sales of $12 million, cost of goods sold (COGS) of $10 million, and an inventory turnover ratio of 2. The company is now adopting a new inventory system. If the new...
-
Williams & Sons last year reported sales of $12 million, cost of goods sold (COGS) of $10 million, and an inventory turnover ratio of 2. The company is now adopting a new inventory system. If the new...
-
Company A has an inventory turnover ratio of 8.0 times. Company B has an inventory turnover ratio of 10.0 times. Both companies are in the same industry. Which company manages its inventory more...
-
Read the Poem Little Birds Flying and answer the following questions: What it is notifying? To whom it is notifying? How is the work two dimensional? What does it take to realize the project? ...
-
In 2018, Western Transport Company entered into the treasury stock transactions described below. In 2016, Western Transport had issued 140 million shares of its $1 par common stock at $17 per share....
-
Calculate the elongation of a copper bar of solid circular cross section with tapered ends when it is stretched by axial loads of magnitude 3.0 k (see figure). The length of the end segments is 20...
-
List the major parts of a complex corporate income statement for WRS Athletic Clubs, Inc., for the year ended December 31, 2007. Include all the major parts of the income statement, starting with net...
-
The following information was taken from the accounts of Healthy Eats, a delicatessen, at December 31, 2013. The accounts are listed in alphabetical order, and each has a normal balance. Accounts...
-
Hi! This is Fin 110. Can you help me step by step, please? QUESTION 1: Mahesh borrowed $5,130 from Becky. He signed a contract agreeing to pay it back 9 months later with 4.75% simple interest. After...
-
Customers arrive to a two server system in accordance with a Poisson process with rate . Server 1 is the preferred server, and an arrival finding server 1 free enters service with 1; an arrival...
-
What kinds of firms use commercial paper?
-
Medwig Corporation has a DSO of 17 days. The company averages $3,500 in credit sales each day. What is the companys average accounts receivable?
-
Each of the double pulleys shown has a mass moment of inertia of 20 kg ?? m2 and is initially at rest. The outside radius is 400 mm, and the inner radius is 200 mm. Determine (a) The angular...
-
A proposal is a plan or suggestion that you put forward to be considered by others. Think of your proposal as a "brainstorm", or a planning guide for your transfer assignment. You can always change...
-
1-Outline of policies and procedures managing the administration of medication SCHOOL SETTING 2- a description of your own responsibilities as a teaching assistant and accountabilities in relations...
-
This question is meant to get at the naure of the movie medium: what are its unique characteristics? Describe what is involved in "going to the movies." What is different about going to the movies...
-
For this thread, consider the importance of relationship maintenance in your life. Pick a close relationship (e.g., parent/child, friendship, romantic) and describe how relationship maintenance (or a...
-
"Persuasive speakers should be concerned with what strengthens and weakens an argument," ( Communication in the Real World , 2013). In your exploration, you watched three TED Talks about issues...
-
A stock currently pays a dividend of $2.00 per share. Expected dividend growth is 20% for the next three years and then is expected to revert to 7% thereafter indefinitely. The required rate of...
-
In the series connection below, what are the respective power consumptions of R, R2, and R3? R R www 4 V=6V P1-3 W; P2=3W; and P3= 3 W OP10.5 W; P2-1 W; and P3= 1.5 W P1=1.5 W; P2=1 W; and P3= 0.5 W...
-
The analysis shown in the figure below also applies to diffraction gratings with lines separated by a distance d. What is the distance between fringes produced by a diffraction grating having 125...
-
The following balance sheet represents Boles Electronics Corporation's position at the time it filed for bankruptcy (in thousands of dollars): The mortgage bonds are secured by the plant, but not by...
-
Define each of the following terms: a. Synergy; merger b. Horizontal merger; vertical merger; congeneric merger; conglomerate merger c. Friendly merger; hostile merger; defensive merger; tender...
-
Four economic classifications of mergers are (1) horizontal, (2) vertical, (3) conglomerate, and (4) congeneric. Explain the significance of these terms in merger analysis with regard to (a) the...
-
Data Table Unit data: Beginning inventory Production January February March 0 100 100 1,000 950 1,020 900 950 1,030 Sales Variable costs: Manufacturing cost per unit produced $ 900 $ 900 $ 900...
-
Job Costing Activity based costing Crambin Pvt Ltd manufactures two products, Product C and Product D. In the current year Crambin produced 4,000 units of Product C and 2,000 units of Product D. The...
-
A 3-year, $3,000 face value bond has a coupon rate of 7%. The current yield of this bond is 5.083% from year 2 to year 3 (as calculated at year 2 right after the 2nd coupon payment). Given that the...
Study smarter with the SolutionInn App