Analyzing and Interpreting the Inventory Turnover Ratio Dell Inc

Analyzing and Interpreting the Inventory Turnover Ratio

Dell Inc. is the leading manufacturer of personal computers. In a recent year, it reported the following in dollars in millions:

Net sales revenue                                $61,101

Cost of sales                                         50,144

Beginning inventory                            1,180

Ending inventory                                 867

Required:

1. Determine the Inventory Turnover Ratio and average days to sell inventory for the current year.

2. Explain the meaning of each number.


Inventory Turnover Ratio
Inventory Turnover RatioThe inventory turnover ratio is a ratio of cost of goods sold to its average inventory. It is measured in times with respect to the cost of goods sold in a year normally.    Inventory Turnover Ratio FormulaWhere,...
Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula                Ending Inventory Formula =...

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