The following data were taken from recent annual reports of Apple Computer, Inc., a manufacturer of personal
Question:
a. Determine the inventory turnover for Apple and American Greetings. Round to two decimal places.
b. Would you expect American Greetings inventory turnover to be higher or lower than Apples?Why?
American Greetings $881,771,000 278,807,000 290,804,000 Apple Cost of goods sold Inventory, end of year Inventory, beginning of the year $4,139,000,000 45,000,000 11,000,000
Step by Step Answer:
a Apple 1478 4139000000 45000000 11000000 2 American Gr...View the full answer
Accounting
ISBN: 978-0324188004
21st Edition
Authors: Carl s. warren, James m. reeve, Philip e. fess
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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