Just a Buck Discount Stores is assessing its levels of inventory for 20Ã7 and 20Ã8 and has
Question:
Compute the inventory turnover and days' inventory on hand for 20Ã7 and 20Ã8 and comment on the results?
20x8 $96,000 20x7 S 81,000 20x6 $69,000 Ending inventory Cost of goods sold 480 ,000 450,000
Step by Step Answer:
Calculation of Inventory turnover of JB Follow the below formula and calculations to calculate inven...View the full answer
Principles of Accounting
ISBN: 978-0618736614
10th edition
Authors: Belverd Needles, Marian Powers, Susan Crosson
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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