The following account balances are taken from the records of Lewis Inc., a wholesaler of fresh fruits and vegetables: Required 1. Compute Lewiss inventory turnover ratio for 2010 and 2009. 2. Compute the number of days sales in inventory for 2010 and 2009. Assume 360 days in a year. 3. Comment on your answers in (1) and (2) relative to
Chapter 13, Exercises #2
The following account balances are taken from the records of Lewis Inc., a wholesaler of fresh fruits and vegetables:
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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,...
Required
1. Compute Lewis€™s inventory turnover ratio for 2010 and 2009.
2. Compute the number of days€™ sales in inventory for 2010 and 2009. Assume 360 days in a year.
3. Comment on your answers in (1) and (2) relative to the company€™s management of inventory over the two years. What problems do you see in its inventorymanagement?
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,...
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Answer
1. Inventory turnover: Cost of goods sold/Average inventory: 2010: $7,100,000/[($200…View the full answer
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