A company reports the following: Cost of goods sold $510,000 Average inventory 60,000 Determine (a) The inventory
Question:
Cost of goods sold $510,000
Average inventory 60,000
Determine
(a) The inventory turnover and
(b) The number of days’ sales in inventory. Round to one decimal place
Step by Step Answer:
a b Cost of Goods sold Average Inventor...View the full answer
Accounting
ISBN: 978-0324662962
23rd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
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.
Students also viewed these Accounting questions
-
Inventory turnover is calculated as cost of goods sold divided by ending inventory . 1. True 2. False
-
A company reports the following information from its financial statements: Required Conduct horizontal and vertical analyses of inventory for the current year. Round percentages to one decimal point...
-
A company reports the following for accounts receivable: Required For each year, determine the company's total or gross accounts receivable, net realizable value of accounts receivable, and allowance...
-
Use the DerivaGem software to value a five-year collar that guarantees that the maximum and minimum interest rates on a LIBOR-based loan (with quarterly resets) are 7% and 5% respectively. The LIBOR...
-
Russell Simons Invested $5,000 to start Def Jam and then later sold his business to Polygram Records for $100 million. Calculate Simmons's return on investment (ROI).
-
In the National Architects example, the VP decides that Skilled personnel should get a weight of 0 . 1 and Aligns with policy / philosophy / culture should increase to 0 . 2 . What are the scores for...
-
Why is the range value affected by outliers?
-
The bank reconciliation prepared by Winfield Construction on June 30, 2020, appeared as follows: The Cash account in the general ledger appeared as follows on July 31: A list of deposits made and...
-
Trevor's new role at Johnson & Johnson gives him the flexibility to develop community projects that he is genuinely interested in. Which of Maslow's Hierarchy of Needs is being met?
-
Case Study 1 2.3 : Penn State Sexual Abuse Scandal 1. How would you describe the followership at Penn State? Whom would you identify as the followers? Who are the leaders? 2. Using Kelley's typology,...
-
A company reports the following: Net sales $600,000 Average accounts receivable (net) 60,000 Determine (a) The accounts receivable turnover and (b) The number of days sales in receivables. Round to...
-
A company reports the following: Cost of goods sold $480,000 Average inventory 80,000 Determine (a) The inventory turnover and (b) The number of days sales in inventory. Round to one decimal place
-
What are the differences between an entrepreneurial leader and an administrator or manager?
-
The text discusses several applications of the prisoner's dilemma. Explain a different situation in which your own self-interest has led to a noncooperative result that was inferior to the...
-
After spending a year and $48,000, you finally have the design of your new product ready. In order to start production, you will need $30,000 in raw materials and you will also need to use some...
-
At her current consumption levels, Megan receives 15 utils from an additional cup of tea and 300 utils from an additional pair of sandals. The price of tea is $ 1 and the price of sandals is $30 per...
-
You have just completed a $24,000 feasibility study for a new coffee shop in some retail space you own. You bought the space two years ago for $96,000, and if you sold it today, you would net...
-
Suppose Rocky Brands has earnings per share of $2.24 and EBITDA of $30.4 million. The firm also has 5.6 million shares outstanding and debt of $140 million (net of cash). You believe Deckers Outdoor...
-
As part of a fraudulent scheme, Rivera induced Talcott to send Rivera a check for $10,000 as an investment made out to Guarino. The following day, Rivera told Talcott that the $10,000 was unnecessary...
-
Repeat Exercise 16.6 using the t-test of the coefficient of correlation. Is this result identical to the one you produced in Exercise 16.6?
-
Consider the time-t value of the LIBOR-in-arrears payment [see (8.3.14a,b)], show that where C j (t; T j ,T j +1 ,X) is the time-t value of the caplet with strike X, resetting at T j and paying max(L...
-
Individual Retirement Account (IRA) Bonds Mutual fund Stocks Futures Defined contribution plans What is it? Level of Risk and Potential Return Minimum investment? Easy to start or stop?
-
1. A company purchased machinery in 2015 for $400,000. Its value in 2018 was $320,000. Assuming the resale value decreases exponentially, what will the value be in 2020? As a part of your solution,...
-
ROA of a company is 8.57%, Total assets end of the year of 2021 are $9.6 million, ROE is 14% and Profit margin of 19.9% what is the firms value of net income? and what is stockholders equity?
Study smarter with the SolutionInn App