Plaids & Stripes and Audrey's Apparel are clothes retailers. August and September are busy months for these
Question:
Plaids & Stripes and Audrey's Apparel are clothes retailers. August and September are busy months for these two stores because many people are buying children new clothes for the start of school. The following information has been given for both stores' children's departments during the months of August and September:
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Using the above information, answer the following questions about Plaids & Stripes and Audrey's Apparel.
1. Using the information given, which store generated the most total profit from inventory sales?
2. Calculate the return on inventory investment for both stores' children's departments. (Use both the profit margin and inventory turnover ratios.)
3. Using the calculations from part (2), which store actually manages its inventory more effectively? Explain youranswer.
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:
1 Audreys Apparel has a higher gross margin 527300 than Plaids Stripes 296100 Thus accordi...View the full answer
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain
