The table that follows reports balance sheet and income statement information for Nike, Best Buy, John....
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The table that follows reports balance sheet and income statement information for Nike, Best Buy, John. son & Johnson, and Boeing from their year-end 2015 SEC filings. Cost of Goods Sold Inventory, 2015 Inventory, 2014 $ millions Sales PPE, Net Nike $30,601 39,528 70,074 85,255 $16,534 $ 4,337 $ 3,947 $ 3,011 2,346 15,905 12,076 Best Buy. Johnson & Johnson 30,334 5,051 21,536 73,446 8,053 47,257 5,174 8,184 Boeing (product sales). .... 46,756 Required a. Compute the days inventory outstanding for each company for 2015. b. Compare the days inventory outstanding across the four companies and consider the industries in which they operate. What do we observe? c. Compute the PPE turnover for each company. d. Why is the PPE turnover for Best Buy so much higher than that for Boeing? e. Which metric is likely easier for these companies to improve, inventory days outstanding or PPE turnover? Explain. The table that follows reports balance sheet and income statement information for Nike, Best Buy, John. son & Johnson, and Boeing from their year-end 2015 SEC filings. Cost of Goods Sold Inventory, 2015 Inventory, 2014 $ millions Sales PPE, Net Nike $30,601 39,528 70,074 85,255 $16,534 $ 4,337 $ 3,947 $ 3,011 2,346 15,905 12,076 Best Buy. Johnson & Johnson 30,334 5,051 21,536 73,446 8,053 47,257 5,174 8,184 Boeing (product sales). .... 46,756 Required a. Compute the days inventory outstanding for each company for 2015. b. Compare the days inventory outstanding across the four companies and consider the industries in which they operate. What do we observe? c. Compute the PPE turnover for each company. d. Why is the PPE turnover for Best Buy so much higher than that for Boeing? e. Which metric is likely easier for these companies to improve, inventory days outstanding or PPE turnover? Explain.
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a Day inventory outstanding is used to determine how many days a company takes to convert its inventory in to sales It is calculated as below Days inv... View the full answer
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