Advanced Micro Devices, a global technology company, reported the following selected items as part of its 2019
Question:
Advanced Micro Devices, a global technology company, reported the following selected items as part of its 2019 annual report (dollars in millions):
INSTRUCTIONS:
Compute the following ratios:
1. Current ratio
2. Quick ratio
3. Receivable turnover (time and days)
4. Interest coverage
5. Return on assets
6. Inventory turnover (times and days)
7. Return on equity
2019 2018 Cash $1,466 $1,078 Accounts receivable 1,859 1,235 Inventory 982 845 Current assets 4,597 3,540 Total assets 6,028 4,556 Current liabilities 2,359 1,984 Shareholders' equity 2,827 1,266 Sales 6,371 3,863 Cost of goods sold Interest expense 94 Net income before taxes 372 Net income 341
Step by Step Answer:
1 Current ratio current assetscurrent liabilities 45976028 762 2 Quick ratio current assets in...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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