Cinnamon Roll, Inc., and Dunking Coffee Corporation are both specialty food chains. The two companies reported these
Question:
Requirements
1. Compute the gross profit percentage and the rate of inventory turnover for Cinnamon Roll, Inc., and Dunking Coffee Corporation for 2012.
2. Based on these statistics, which company looks more profitable? Why? What other expense category should we consider in evaluating these twocompanies?
Cinnamon Roll, Inc. Income Statements (Adapted) Years Ended December 31 (Amounts in millions) Revenues: 2012 2011 Net sales S542 $704 Costs and Expenses: Cost of goods sold Selling, general, and administrative e 474 67 592 50 innamon Roll, Inc. Balance Sheets (Adapted) December 31 (Amounts in millions) 2012 2011 Assets Current assets: Cash and cash equivalents Receivables $16 27 $26 36 Dunking Coffee Corporation Income Statements (Adapted) Years Ended December 31 Amounts in millions Net sales Cost of goods sold Selling, general, and administrative expenses 2012 2011 S7,777 S6,369 3,180 2,600 3,000 2,350 Dunking Coffee Corporation Balance Sheets (Adapted) December 31 Amounts in millions) 2012 2011 Assets Current assets: Cash and temporary investments Receivables, net Inventories $318$171 194 541 227 625
Step by Step Answer:
Req 1 Cinnamon Roll Inc Dunking Coffee Corp Dollars in Millions ...View the full answer
Financial accounting
ISBN: 978-0132751124
9th edition
Authors: Walter T. Harrison Jr., Charles T. Horngren, C. William Thom
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 Managerial Accounting questions
-
Assume Loblaw Companies Limited reported these figures in millions of dollars: Requirements 1. Compute Loblaw's average collection period during 2014. 2. Was Loblaw's collection period long or short?...
-
Sprinkle Top and Coffee Shop are both specialty food chains. The two companies reported these figures, in millions: Requirements 1. Compute the gross profit percentage and the rate of inventory...
-
Pastry People and Coffee Grind are both specialty food chains. The two companies reported these figures, in millions: Requirements 1. Compute the gross profit percentage and the rate of inventory...
-
Assume the following for the Howard Saks firm: Actual earnings of $28,000, beginning book value of $250,000, ending book value of $350,000, cost of capital of 6%. What are their abnormal earnings?
-
Write out the treatment combinations for a 24 factorial experiment.
-
For a short time, the crane lifts the 2.5 Mg beam with a force F = (28 + 3 s 2 ) kN. Determine the speed of the beam when it has risen s = 3 m A F
-
Do you think the use of technology in sports is based on the desire to gain an advantage or the fear of competing at a disadvantage? Is this an ethical concern for the use of technology?
-
The Giles Agency offers a 12% trade discount when providing advertising services of $1,000 or more to its customers. Audreys Antiques decides to purchase advertising services of $3,500 (not including...
-
Why should the legal team consider the defense perspective when conducting its investigation? How is the preparation of a timeline helpful in investigation of claims?
-
The treasurer of United Southern Capital Co. has submitted a proposal to the board of directors that, he argues, will increase profits for the all-equity company by a whopping 55%. It costs $900 and...
-
Saltwater Trade Mart has recently had lackluster sales. The rate of inventory turnover has dropped, and the merchandise is gathering dust. At the same time, competition has forced Saltwaters...
-
Assume Young Company, a music store, lost some inventory in a fire on March 15. To file an insurance claim, Young Company must estimate its March 15 inventory by the gross profit method. Assume that...
-
Beverly and Charlie are married and have 1 child, Carla, who is 8 years old. With all the changes in the tax law concerning higher education expenses, Beverly and Charlie realize they need to plan...
-
How did Franklin D. Roosevelt used ethos, pathos, or logos in "The Four Freedoms" speech?
-
explain Montessori schools system . please i need references ,
-
How to analyze decision scenario cases, executive summary.
-
1.0 8 10 If f f(x) dx = 17 and f(x)dx = 12, find r=12, find [(3(x)+2)dx 0 8
-
(a) Consider a two-period binomial setting. The current price of a stock is 80. For each of the next two periods, the stock will either move up by 10% or down by 10%. The risk-free rate per period is...
-
Mining engineers often have to deal with gases when planning for the excavation of coal. Some of these gases, including methane, can be captured and used as fuel to support the mining operation. For...
-
The pendulum consists of two rods: AB is pin supported at A and swings only in the y-z plane, whereas a bearing at B allows the attached rod BD to spin about rod AB. At a given instant, the rods have...
-
Although depreciation is not a cash flow item, it plays an important role in the calculation of cash flows. How does depreciation affect a projects cash flows?
-
The following balance sheet data for Finn Company are shown below. a. Determine the working capital and current ratio for 2012 and 2011.b. Does the change in the current ratio form 2011 to 2012...
-
For the past several years, Shane Banovich has operated a part-time consulting business from his home. As of October 1, 2012, Shene decided to move to rented quarters and to operate the business as...
-
The ledger and trial balance of Sweetwater Services Co. as of July 31, 2012, the end of the first month of its current fiscal year, are presented in the working papers. Date needed to determine the...
-
Predict the output of the following program? import java.io.*; public class Test { public static void main(String[] args) throws IOException { try (ObjectOutputStream output = } new...
-
A TLB contains three entries and uses LRU for the replacement policy. Initially, TLB entries are empty. Following is the trace. Note that A,B,C D represent the page numbers of the memory references....
-
3. [16 points] Consider the following language: (a) [6 points] Prove that L is not context-free. L = {a^bn | n 1}.
Study smarter with the SolutionInn App