Cisco Systems, Inc.

Summary:

• Beginning Inventory: $4,000,000
• Purchases: $14,000,000
• Ending Inventory: $3,700,000
• Net Sales: $23,000,000
• Operating Expenses: $6,500,000

Requirements:

1. Create the Cost of Goods Sold (COGS) statement.
2. Determine the Gross Profit.
3. Calculate the Inventory Turnover Ratio.
4. Draft a partial Income Statement showing Net Sales, COGS, and Gross Profit.
5. Analyze how Cisco's inventory turnover ratio impacts its hardware and software product lines.