Comparative figures for Apple and Google follow. Required 1. Compute inventory turnover for each company for the
Question:
Comparative figures for Apple and Google follow.
Required
1. Compute inventory turnover for each company for the most recent two years shown.
2. Compute days’ sales in inventory for each company for the three years shown.
3. Did the current-year inventory turnover underperform or outperform the industry’s average turnover of 15 in the case of (a) Apple and (b) Google?
Аpple Google Current One Year Two Years Cuтent One Year Two Years $ millons Year Prlor Prlor Year Prior Prlor Inventory..... $ 3,956 $ 4,855 $ 2,132 $ 1,107 $ 749 $ 268 Cost of sales... 163,756 141,048 131,376 59,549 45,583 35,138
Step by Step Answer:
Requirement 1 Inventory turnover Current Year One Year Prior Apple 372 times 404 times Google 642 ti...View the full answer
Financial Accounting Information For Decisions
ISBN: 9781260705584
10th Edition
Authors: John J. Wild
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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