Captain Geech Boating Company sells fishing boats to fishermen. Its beginning and ending inventories for 2012 are
Question:
Captain Geech Boating Company sells fishing boats to fishermen. Its beginning and ending inventories for 2012 are $462 million and $653 million, respectively. It had cost of goods sold of $1,578 million for the year ended December 31, 2012. Merchant Marine Company also sells fishing boats. Its beginning and ending inventories for the year 2012 are $120 million and $90 million, respectively. It had cost of goods sold of $1,100 million for the year ended December 31, 2012.
Required:
1. Calculate the inventory turnover and number of days’ sales in inventory for the two companies.
2. Interpretive Question: Are the results of these ratios what you expected? Which company is managing its inventory more efficiently?
Step by Step Answer:
1 2 The results of the ratios show that Captain Geech Boating ha...View the full answer
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain
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 Managerial Accounting questions
-
The Cole Corporation had cost of goods sold of $ 685,000 during 2010. Based on the beginning and ending balances of the Inventory and Accounts Payable Merchandise accounts, how much cash did Cole...
-
Inventory turnover is calculated as cost of goods sold divided by ending inventory . 1. True 2. False
-
Inventory and cost of goods sold information for Lafleche Inc. is provided below: Required: a. Calculate the inventory turnover ratio and average number of days in inventory under the two cost...
-
Stems of the first land plants functioned primarily as transport and support structures. Modern stems have these functions also, plus several more. Describe the additional functions.
-
On January 3, 2016, Persoff Corporation acquired all of the outstanding voting stock of Sea Cliff, Inc., in exchange for $6,000,000 in cash. Persoff elected to exercise control over Sea Cliff as a...
-
The following transactions of Beltville College transpired during 2020. The funds necessary are the Endowment Fund, the Annuity Fund, the Plant Fund?Unexpended, the Plant Fund?Investment in Plant,...
-
What, if any, further research needs to be undertaken before attempting to export to the United States?
-
1. Describe the orchestras pay structure in terms of levels, differentials, and job- or person-based approach. 2. Discuss what factors may explain the structure. Why does violinist I receive more...
-
What do we (the world) action about rapidly increasing poverty- everywhere? Outline Stiglitz' response in your answer and either agree or disagree with his approach....
-
Complete Keith's tax return including all required schedules and forms using prince edward island as province, using the fillable forms package. Taxpayers Information Taxpayer #1 Name: Keith Dox...
-
The following accounts receivable information is for Rouge Company: Required: Is there any cause for alarm in the accounts receivable data for 2012?Explain. 2012 2011 2010 Accounts receivable Sales...
-
Waystation Company reported the following asset values in 2011 and 2012: In addition, Waystation had sales of $4,000,000 in 2012. Cost of goods sold for the year was $2,500,000. As of the end of...
-
McKeoun Enterprises is a large machine tool company now experiencing alarming increases in maintenance expense in each of its four production departments. Maintenance costs are currently allocated to...
-
Briefly explain how proxy error of x affects the results from a standard linear regression.
-
What is proxy error? Give some examples of proxy error in economics, accounting, and finance.
-
What is an autoregressive process? What are the advantages and disadvantages of using an autoregressive process for forecasting?
-
What is exponential smoothing? What are the advantages and disadvantages of using exponential smoothing for forecasting?
-
What might be examples of true differentiations in digital platforms?
-
Why are procedural design approaches still practiced with many embedded systems even with completely new products? What could be hindering the adoption of object - oriented approaches in those cases?
-
What is a make-or-buy decision?
-
Refer to the following system of linear inequalities: Is the point (4, 5) in the solution region? 4x + y = 20 3x + 5y = 37 x 0 y 0
-
You should recognize that basing a decision solely on expected returns is only appropriate for risk neutral individuals. Since your client, like virtually everyone, is risk averse, the riskiness of...
-
What type of risk is measured by the standard deviation?
-
Draw a graph which shows roughly the shape of the probability distributions for Alta Inds, Am Foam, and T-bills.
-
Big Tommy Corporation is a local grocery store organized seven years ago as a corporation. The bookkeeper prepared the following statement at year-end (assume that all amounts are correct, but note...
-
Simplify. -3(a + b[2a-a(4 - b)])
-
Defining strategy is not simple. Understanding different ways of thinking about strategy is the first toward mastering the art and science of strategic management. Strategy is a complex concept that...
Study smarter with the SolutionInn App