Financial information for Bell and Gangway (two computers manufactures) follows: Required a. Compare Bell and Gangway in
Question:
Financial information for Bell and Gangway (two computers manufactures) follows:
Required
a. Compare Bell and Gangway in terms of their percentage changes in sales and gross margin.
b. Compare Bell and Gangway in terms of their gross margin percentages.
c. Compare Bell and Gangway in terms of inventory turnover and days ‘sales in inventory
d. In your opinion, which ï¬rm has had better financial performance? Support your answer using your calculations in parts a, b, andc.
Bell 12/31/2011 12/31/2010 Gangway in millions) Sales Cost of sales Gross margin Inventory 12/31/2011 $8,922 7,316 $1,606 400 12/31/2010 $8,457 6,951 $1,506 351 $61,133 $57,420 47,904 $ 9,516 660 49462 $11,671 $ 1,180
Step by Step Answer:
a Bell Gangway Percentage change in sales 65 55 Percentage change in gross margin 2...View the full answer
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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