Turner Electronics Is a Retail Store That Specializes in the Sale

Essay

Turner Electronics is a retail store that specializes in the sale of small electronics including televisions, computers, and stereo equipment. Management has been concerned that the company is both overordering and not turning over merchandise as quickly as they did in years prior. Once inventory has been available for sale for six months, the store marks the sales price down so that they can make room for new products. Management would like to perform some analysis and determine if their concerns are valid. Here is some partial information from their recent financial statements: Use the information above to answer the following questions. (Use 365 days in each year, and round all calculations to two decimal places.)
a. What is the Inventory Turnover in Years 1 and 2, and what is the percentage change between years?
b. Based on the answer from part a, determine the Days' Sales in Inventory in Years 1 and 2, and calculate the change between the two years.
c. Based on this initial analysis, which year was more efficient at turning over inventory, and what suggestions, if any, could be made to management to improve these financial metrics?