Wild Things, Inc., has the following information as of December 31, 2018: Requirements 1. Compute the rate
Question:
Wild Things, Inc., has the following information as of December 31, 2018:
Requirements
1. Compute the rate of inventory turnover for Wild Things, Inc., for the year ended December 31, 2018. Round the result to two decimal places.
2. The rate of inventory turnover for Wild Things, Inc., was 12.16 in 2017. Has the rate improved or deteriorated?
Sales Revenue.. Cost of Goods Sold: Beginning Inventory. Net Purchases.. Cost of Goods Available Ending Inventory.. Cost of Goods Sold. Gross Profit.. Operating Expenses Net Income . $675,000 $ 38,000 426,500 464,500 36,400 428,100 246,900 125,300 $121,600
Step by Step Answer:
Req 1 Inventory Turnover Cost of Goods Sol...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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