The data below present key ratios for six well-known U.S. corporations: Apple, Boeing, Citigroup, Facebook, McDonalds, and
Question:
Return on equity (% Return on assets (%) Profit margin (%) Gross margin(%} Price to earnings (X) Asset turnover (X) 21.89 40.39 13.39 659 35.19 29.50 8.07 4.88 11.25 072 15.66 18.82 3.42 5.04 21.57 17.7719.58 21.42 NA 38.77 37.08 15.71 22.73 81.54 11.16 18.50 15.20 2.36 0.37 0.52 0.04 0.80 0.88 Collection period (days 4.70 28.34 34.08 NA 15.92 17.40 NA 163.35 71.14 76.00 61.54 2.34 221.30 86.25 14.11 Times interest earned (X) 13.50 33.05 10.00 2.2121.74 NA 0.88 1.23 13.56 0.31.56 1.63 0.21 0.38 13.56 0.381.53 1.59 24.81 15.18 78.41 8.11 1.75 NA Inventory turnover (X) Debt to equity (%} Current ratio (X Acid test (X) (NA Not applicable)
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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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