Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby

Exercise 64

Calculating and Interpreting the Inventory Turnover Ratio and Days to Sell
Harman International Industries is a world leading producer of loudspeakers and other electronics products, which are sold under brand names like JBL, Infinity, and Harman/Kardon. 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 2010 and 2009. Round to one decimal place.
2. Comment on any changes in these measures, and compare the effectiveness of inventory managers at Harman to inventory managers at Pioneer Corporation , where inventory turns over 5.2 times per year (70 days to sell). Both companies use the same inventory costing method (FIFO).