Harman International Industries is a world leading producer of loudspeakers and other electronics products, which are sold

Question:

Harman International Industries is a world leading producer of loudspeakers and other electronics products, which are sold under brand names like JBL, Infinity, and Harman/Kardon. The company reported the following amounts in its financial statements (in millions):

2010 2009

Net Sales....................... $3,364................... $2,855

Cost of Goods Sold............. 2,479..................... 2,210

Beginning Inventory............ ...334........................ 391

Ending Inventory.................. 353........................ 334

Required:

1. Determine the inventory turnover ratio and average days to sell inventory for 2010 and 2009. Round to one decimal place.

2. Comment on any changes in these measures, and compare the effectiveness of inventory managers at Harman to inventory managers at Pioneer Corporation, where inventory turns over 5.2 times per year (70 days to sell). Both companies use the same inventory costing method (FIFO).

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...