Question

A recent annual report of Kraft Foods, Inc., reveals the following information (dollar amounts are stated in millions):
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $24,651
Inventory (beginning of year) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,506
Inventory (end of year) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,096
Average time required to collect accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . 45 days
a. Compute Kraft’s inventory turnover for the year (round to nearest tenth).
b. Compute the number of days required by Kraft to sell its average inventory (round to the nearest day).
c. What is the length of Kraft’s operating cycle?
d. What comparative information would you want to be able to evaluate Kraft’s operating cycle figure?



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  • CreatedApril 17, 2014
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