The following data were taken from recent annual reports of Apple Computer, Inc., a manufacturer of personal
Question:
The following data were taken from recent annual reports of Apple Computer, Inc., a manufacturer of personal computers and related products, and American Greetings Corporation, a manufacturer and distributor of greeting cards and related products:
a. Determine the inventory turnover for Apple and American Greetings. Round to one decimal place.
b. Would you expect American Greetings' inventory turnover to be higher or lower than Apple's? Why?
Apple American Greetings $826,791,000 187,817,000 230,308,000 13,717,000,000 Cost of goods sold Inventory, end of year Inventory, beginning of the year 270,000,000 165,000,000
Step by Step Answer:
The following data were taken from recent annual reports of App...View the full answer
Accounting
ISBN: 978-0324401844
22nd Edition
Authors: Carl S. Warren, James M. Reeve, Jonathan E. Duchac
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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