Financial statement data for years ending December 31 for Salsa Company follow: a. Determine the inventory turnover
Question:
Financial statement data for years ending December 31 for Salsa Company follow:
a. Determine the inventory turnover for 20Y7 and 20Y6. Round to decimal place.
b. Determine the days’ sales in inventory for 20Y7 and 20Y6. Use 365 days and round to one decimal place.
c. Does the change in inventory turnover and the days’ sales in inventory from 20Y6 to 20Y7 indicate a favorable or an unfavorable trend?
20Υ7 20Υ6 Cost of merchandise sold $2,912,700 $3,009,790 Inventories: Beginning of year 489,000 481,900 End of year 533,000 489,000
Step by Step Answer:
Accounting
ISBN: 9781337902687
28th Edition
Authors: Carl S. Warren, Christine Jonick, Jennifer Schneider
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 Business questions
-
Financial statement data for years ending December 31 for Latchkey Company follows: a. Determine the ratio of sales to assets for 2016 and 2015. b. Does the change in the ratio of sales to assets...
-
Financial statement data for years ending December 31 for Edison Company follows: a. Determine the ratio of sales to assets for 2016 and 2015. b. Does the change in the ratio of sales to assets from...
-
Financial statement data for years ending December 31 for Holland Company follows: a. Determine the inventory turnover for 2016 and 2015. b. Determine the number of days' sales in inventory for 2016...
-
An investor has $60,000 to invest in a $280,000 property. He can obtain either a $220,000 loan at 9.5 percent for 20 years or a $180,000 loan at 9 percent for 20 years and a second mortgage for...
-
Discuss the advantages of a robotic total station instrument.
-
The Great Eastern Toy Company management is considering an investment in a new product. It would require the acquisition of a piece of equipment for $16 million with a ten-year operational life,...
-
Panther Racing, LLC, is involved in competitive racing, including the development, maintenance, and operation of a racing team in the IndyCar series. Beginning in 2008, the National Guard annually...
-
The following is Sullivan Corp.'s comparative balance sheet accounts at December 31, 2010 and 2009, with a column showing the increase (decrease) from 2009 to 2010. Additional information: 1. On...
-
Analyses at least two considerations that would be required to ensure effective transaction transparency of centralized database management systems and distributed database management systems....
-
Profitability remains a challenge for banks and thrifts with less than $ 2 billion of assets. The business problem facing a bank analyst relates to the factors that affect return on assets (ROA), an...
-
The following data (in millions) were taken from recent annual reports of Apple Inc., a manufacturer of personal computers and related products, and Mattel Inc., a manufacturer of toys, including...
-
On the basis of the following data, determine the value of the inventory at the lower of cost or market. Assemble the data in the form illustrated in Exhibit 9. Inventory Item Cost per Unit Market...
-
What is meant by marginal analysis? Provide an example in which marginal analysis is useful in looking at policy questions.
-
During floor - planning, which phase is most important in minimizing the area and interconnections of the IC ? ? Question 1 5 1 5 Answer global routing detailed rounting none of the given answers...
-
An IT company has 1 0 0 1 0 0 servers. Due to increased users, the business purchases another 1 5 0 1 5 0 similar servers to enhance their IT performance. This type of scalability is called _ _ ? _ _...
-
Which technique involves modifying the OS kernel? Full Virtualization Paravirtualization Hardware - assisted virtualisation
-
is not a dynamic routing protocol Question 6 6 Answer a . . None of the above b . . OSPF c . . EIGRP d . . RIP
-
Write a Verilog module named alu corresponding to the diagram shown below. The module has a w-bit in- put B, a 2-bit input op, a clock input clk, and a w-bit registered output A. The module...
-
Repeat Exercise 8 using the modified Gram-Schmidt process and compare answers. In Exercise 8 Use the Gram-Schmidt process to find an orthonormal basis for the subspace of R4 spanned by x1 = (4, 2,...
-
"Standard-cost procedures are particularly applicable to process-costing situations." Do you agree? Why?
-
On July 1, 2005, Blair Co. pays $18,000 to Hindi Insurance Co. for a 3-year insurance contract. Both companies have fiscal years ending December 31. For Blair Co. journalize the entry on July 1 and...
-
Using the data in BE3-3, journalize the entry on July 1 and the adjusting entry on December 31 for Hindi Insurance Co. Hindi uses the accounts Unearned Insurance Revenue and Insurance Revenue.
-
Using the data in BE3-3, journalize the entry on July 1 and the adjusting entry on December 31 for Hindi Insurance Co. Hindi uses the accounts Unearned Insurance Revenue and Insurance Revenue.
-
Write HTML and CSS code to create a simple webpage layout with a header, navigation bar, content area, and footer.
-
A block of mass m = 8.41 kg slides down from an inclined frictionless ramp that forms an angle 0 34.04 with the ground. A long spring with a spring constant k =761.53 N/m is situated at the base of...
-
In the Olympic shotput event, an athlete throws the shot with an initial speed of 13.0 m/s at a 46.0 angle from the horizontal. The shot leaves her hand at a height of 1.80 m above the ground. - Part...
Study smarter with the SolutionInn App