The following financial statement data for years ending December 31 for Holland Company are shown below. a.
Question:
The following financial statement data for years ending December 31 for Holland Company are shown below.
a. Determine the inventory turnover for 2014 and 2013.
b. Determine the number of days’ sales in inventory for 2014 and 2013. Round to one decimal place.
c. Does the change in inventory turnover and the number of days’ sales in inventory from 2013 to 2014 indicate a favorable or an unfavorabletrend?
2014 2013 Cost of merchandise sold Inventories 1,452,500 $1,120,000 Beginning of year End of year 380,000 450,000 320,000 380,000
Step by Step Answer:
a b c The increase in the inventory turnover from 3 2 to 3 5 and the decrease in the number of …View the full answer
Corporate Financial Accounting
ISBN: 978-1133952411
12th 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.
Students also viewed these Managerial Accounting questions
-
The following financial statement data for years ending December 31 for Foodworks Company are shown below.a. Determine the ratio of net sales to assets for 2012 and 2011.b. Does the change in the...
-
The following financial statement data for years ending December 31 for Foodworks Company are shown below. a. Determine the ratio of net sales to assets for 2012 and 2011. b. Does the change in the...
-
The following financial statement data for years ending December 31 for Gillispie Company are shown below. a. Determine inventory turnover for 2012 and 2011. b. Determine the number of days sales in...
-
You have observed the following returns over time: Assume that the risk-free rate is 6% and the market risk premium is 5%. a. What are the betas of Stocks X and Y? b. What are the required rates of...
-
(a) Why does xenon react with fluorine, whereas neon does not? (b) Using reference sources such as the CRC Handbook of Chemistry and Physics or online sources look up the bond lengths of Xe - F bonds...
-
The following information concerns production in the Forging Department for November. All direct materials are placed into the process at the beginning of production, and conversion costs are...
-
A simple well-known game, tic-tac-toe, is played on a three-by-three grid of squares by two players. The players alternate turns. Each player chooses a square and places a mark in a square. (One...
-
Fausto Fabricators Inc. uses a standard cost system to account for its single product. The standards established for the product include the following: Materials . . . . . . . . . . . . . . . . . . ....
-
A local political campaign must coordinate a number of necessary activities to be prepared for an upcoming election. The following table describes the relationships between these activities that need...
-
During the taking of its physical inventory on December 31, 2014, Waterjet Bath Company incorrectly counted its inventory as $728,660 instead of the correct amount of $719,880. Indicate the effect of...
-
The following financial statement data for years ending December 31 for Tango Company are shown below. a. Determine the inventory turnover for 2014 and 2013. b. Determine the number of days sales in...
-
Why are newly hired systems analysts often assigned to maintenance projects?
-
Figure Q5 shows an arrangement of four springs in series being depressed with a force F of 200 lb. Figure Q5 ke k At equilibrium, force-balance equations can be developed defining the...
-
Given a Three-Phase Y Connection load: VLL-208 <30 V P= 7500 W Power Factor = 0.9 Leading Find: Q, Complex I line, and Complex I phase, S3-, Complex S3- in polar and rectangular, and the Impedance...
-
The income statement and balance sheet for Home Depot is found below. Based on these statements, what was the TIE ratio for 2020? Consolidated Statements of amnings unso (5) $in Milli Income...
-
Lynne has access to a HELOC that requires only the payment of accrued interest on the first of every month. On March 1, the opening balance on her HELOC was $19,000.00. She took advances of $6,000.00...
-
In Exercises 116, use the graph of y = f(x) to graph each function g. g(x) = f(-x) + 3 y y = f(x) 4- (-2,2) 1- -5-4-3-2. [T (0,2) (2.2) H 1 2 3 4 5 [IIIDIICO X
-
Sundial Technologies produces and sells customized network systems in New Brunswick. The company offers a 60-day, all software and labor-and an extra 90-day, parts-only- warranty on all of its...
-
Guardian Security Services was established on January 15, 2016, to provide security services. The services provided during the remainder of the month are as follows: Jan. 18. Issued Invoice No. 1 to...
-
Plumb Line Surveyors provides survey work for construction projects. The office staff uses office supplies, while surveying crews use field supplies. Purchases on account completed by Plumb Line...
-
The transactions completed by AM Express Company during March 2016, the first month of the fiscal year, were as follows: Mar. 1. Issued Check No. 205 for March rent, $2,450. 2. Purchased a vehicle on...