Following are key figures (in millions of Korean won) for Samsung (Samsung.com), which is a leading manufacturer
Question:
Following are key figures (in millions of Korean won) for Samsung (Samsung.com), which is a leading manufacturer of consumer electronics products.
Required
1. Use these data and those from BTN 6-2 to compute (a) inventory turnover and (b) days' sales in inventory for the most recent two years shown for Samsung, Apple, and Microsoft.
2. Comment on and interpret your findings from part 1.
In millions One Year Prior Current Year \ 18,811,794 123,482,118 Two Years Prior \ 19,134,868 37,696,309 \ 17,317,504 128,278,800 Cost of sales
Step by Step Answer:
1 Inventory turnover Cost of sales Average inventory Current year X Samsung in millions of K...View the full answer
Fundamental Accounting Principles
ISBN: 978-1259536359
23rd edition
Authors: John Wild, Ken Shaw, Barbara Chiappett
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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