Best Buy is a leading national retailer of brand-name consumer electronics, personal computers, and entertainment software. The company reported the following amounts in its financial statements (in millions). 2011 2010 Net Sales Revenue............................ $50,272........ $49,694 Cost of Goods Sold............................ 37,611.......... 37,534 Beginning Inventory............................ 5,486............ 4,753 Ending Inventory ............................... 5,896............ 5,486 Required: 1. Determine the inventory turnover ratio and average days
Best Buy is a leading national retailer of brand-name consumer electronics, personal computers, and entertainment software. The company reported the following amounts in its financial statements (in millions).
2011 2010
Net Sales Revenue............................ $50,272........ $49,694
Cost of Goods Sold............................ 37,611.......... 37,534
Beginning Inventory............................ 5,486............ 4,753
Ending Inventory............................... 5,896............ 5,486
Required:
1. Determine the inventory turnover ratio and average days to sell inventory for 2011 and 2010. Round your answers to one decimal place.
2. Comment on any changes in these measures, and compare the effectiveness of inventory managers at Best Buy with GameStop, where inventory turns over 6.0 times per year (61 days to sell)
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 =... Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
2011 2010
Net Sales Revenue............................ $50,272........ $49,694
Cost of Goods Sold............................ 37,611.......... 37,534
Beginning Inventory............................ 5,486............ 4,753
Ending Inventory............................... 5,896............ 5,486
Required:
1. Determine the inventory turnover ratio and average days to sell inventory for 2011 and 2010. Round your answers to one decimal place.
2. Comment on any changes in these measures, and compare the effectiveness of inventory managers at Best Buy with GameStop, where inventory turns over 6.0 times per year (61 days to sell)
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 =... Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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Related Book For 
Fundamentals of Financial Accounting
4th edition
Authors: Fred Phillips, Robert Libby, Patricia Libby
ISBN: 978-0078025372