Following are asset turnover rates for accounts receivable; inventory; and property, plant, and equipment (PPE) for Best
Question:
Following are asset turnover rates for accounts receivable; inventory; and property, plant, and equipment (PPE) for Best Buy Co., Inc. (BBY) (retailer), Caterpillar Inc. (CAT) (manufacturer of heavy equipment), Dell Inc. (DELL) (computers), Verizon Communications, Inc. (VZ) (communications), and Walmart Stores, Inc. (WMT) (department store).
Required
a. Interpret and explain difference in receivables turnover for the retailer (Best Buy) vis-à-vis that for the manufacturer (Caterpillar). What reason can you give for a 73.85 turnover for Walmart?
b. Interpret and explain the difference in inventory turnover for Dell versus Caterpillar.
c. Why is the PPE turnover for Verizon low compared with other companies on this list?
d. What are some general observations you might draw regarding the relative levels of these turnover rates across the different industries?
Step by Step Answer:
Financial And Managerial Accounting For MBAs
ISBN: 9781618533593
6th Edition
Authors: Peter D. Easton