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Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
Edition 4ISBN: 978-0078025372Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
Edition 4ISBN: 978-0078025372 Exercise 38
Calculating and Interpreting the Inventory Turnover Ratio and Days to Sell
Best Buy is a leading national retailer of brand-name consumer electronics, personal computers, and entertainment software. The company reported the following amounts in its financial statements (in millions).
Required:
1. Determine the inventory turnover ratio and average days to sell inventory for 2011 and 2010. Round your answers to one decimal place.
TIP: Remember to use costs in both the numerator (CGS) and denominator (average inventory).
2. Comment on any changes in these measures, and compare the effectiveness of inventory managers at Best Buy with GameStop , where inventory turns over 6.0 times per year (61 days to sell).
Best Buy is a leading national retailer of brand-name consumer electronics, personal computers, and entertainment software. The company reported the following amounts in its financial statements (in millions).
Required:
1. Determine the inventory turnover ratio and average days to sell inventory for 2011 and 2010. Round your answers to one decimal place.
TIP: Remember to use costs in both the numerator (CGS) and denominator (average inventory).
2. Comment on any changes in these measures, and compare the effectiveness of inventory managers at Best Buy with GameStop , where inventory turns over 6.0 times per year (61 days to sell).
Explanation
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1.
The calculations of inventory turnove...
Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
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