The following data (in millions) were taken from recent annual reports of Apple Inc., a manufacturer of
Question:
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 Barbie®, Hot Wheels®, and Disney Classics:
a. Determine the inventory turnover for Apple and Mattel. Round to one decimal place.
b. Would you expect Mattel’s inventory turnover to be higher or lower than Apple’s? Why?
Cost of merchandise sold Inventory, end of year Inventory, beginning of the year Apple $163,756 3,956 Mattel $2,716 543 4,855 601
Step by Step Answer:
ANSWER a The inventory turnover for Apple is 41 163756 39...View the full 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.
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