Question

In: Finance

What is the relationship between the inventory turnover ratio and the "days of inventory"? For a...

What is the relationship between the inventory turnover ratio and the "days of inventory"? For a given amount of cost of goods sold, as inventory turnover ratio increases, the "days of inventory"

cannot be predicted to increase or decrease

increases

initially increases, then decreases

decreases

Solutions

Expert Solution


Related Solutions

Current Ratio: Asset Turnover Ratio: Inventory Turnover Ratio: Days In Sales Inventory Ratio: Gross Margin Ratio:...
Current Ratio: Asset Turnover Ratio: Inventory Turnover Ratio: Days In Sales Inventory Ratio: Gross Margin Ratio: Earning Per Share Ratio: Discuss what each ratio indicates about company performance. What does each ratio “tell” about a company? Interpret the ratios and use the interpretation as a basis to analyze the operational effectiveness .
I want to know the relationship between inventory turnover ratio and allowance for obsolescence in inventory....
I want to know the relationship between inventory turnover ratio and allowance for obsolescence in inventory. Basically, I am analyzing a company's financial statement, and this company is in bad position, high leverage (borrowed 1B last year), one of the sector filled chapter 11, and there are many other bad signs. Therefore, I thought the inventory turnover ratio in 2016 would be better than 2017's, however, it came out to be 2017's inventory turnover ratio was little bit higher than...
Average Inventory, Inventory Turnover Ratio, Inventory Turnover in Days Belt Company had net sales of $1,891,675,000...
Average Inventory, Inventory Turnover Ratio, Inventory Turnover in Days Belt Company had net sales of $1,891,675,000 and cost of goods sold of $1,713,635,000. Belt had the following balances: January 1 December 31 Inventories $301,500,000 $385,000,000 Required: Assume 365 days per year. 1. Calculate the average inventory. $ 2. Calculate the inventory turnover ratio. Round to two decimal places. times 3. Calculate the inventory turnover in days. Round to two decimal places. days
17) Which of the following statements is CORRECT? a. The inventory turnover ratio and days sales...
17) Which of the following statements is CORRECT? a. The inventory turnover ratio and days sales outstanding (DSO) are two ratios that are used to assess how effectively a firm is managing its current assets. b. If a firm sold some inventory on credit as opposed to cash, then there is no reason to think that either its current or quick ratio would change. c. If a firm sold some inventory on credit, then its current ratio would probably not...
The steel company is trying to determine the effect of its inventory turnover ratio and days...
The steel company is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO) on its cash flow cycle. Company’s sales last year (all on credit) were $150,000, and it earned a net profit of 6%, or $9,000. It turned over its inventory 7.5 times during the year, and its DSO was 36.5 days. Its annual cost of goods sold was $121,667. The firm had fixed assets totaling $35,000. Steel's payables deferral period is 40...
Total assets turnover: 1x Days sales outstanding: 37 daysa Inventory turnover ratio: 6x Fixed assets turnover:...
Total assets turnover: 1x Days sales outstanding: 37 daysa Inventory turnover ratio: 6x Fixed assets turnover: 3x Current ratio: 2.5x Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 15% aCalculation is based on a 365-day year. Do not round intermediate calculations. Round your answer to the nearest cent. Balance Sheet Cash $ Current liabilities $ Accounts receivable Long-term debt 30,000 Inventories Common stock Fixed assets Retained earnings 60,000 Total assets $200,000 Total liabilities and equity $...
Chastain Corporation is trying to determine the effect of its inventory turnover ratio and days sales...
Chastain Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO) on its cash conversion cycle. Chastain's 2016 sales (all on credit) were $241,000; its cost of goods sold is 80% of sales; and it earned a net profit of 2%, or $4,820. It turned over its inventory 6 times during the year, and its DSO was 34.5 days. The firm had fixed assets totaling $27,000. Chastain's payables deferral period is 45 days....
Chastain Corporation is trying to determine the effect of its inventory turnover ratio and days sales...
Chastain Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO) on its cash conversion cycle. Chastain's 2019 sales (all on credit) were $208,000, its cost of goods sold is 80% of sales, and it earned a net profit of 7%, or $14,560. It turned over its inventory 4 times during the year, and its DSO was 33 days. The firm had fixed assets totaling $44,000. Chastain's payables deferral period is 40 days....
Chastain Corporation is trying to determine the effect of its inventory turnover ratio and days sales...
Chastain Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO) on its cash conversion cycle. Chastain's 2016 sales (all on credit) were $158000; its cost of goods sold is 80% of sales; and it earned a net profit of 4%, or $6320. It turned over its inventory 5 times during the year, and its DSO was 33.5 days. The firm had fixed assets totaling $49000. Chastain's payables deferral period is 45 days....
Chastain Corporation is trying to determine the effect of its inventory turnover ratio and days sales...
Chastain Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO) on its cash conversion cycle. Chastain's 2016 sales (all on credit) were $100,000; its cost of goods sold is 80% of sales; and it earned a net profit of 2%, or $2,000. It turned over its inventory 6 times during the year, and its DSO was 34 days. The firm had fixed assets totaling $35,000. Chastain's payables deferral period is 50 days....
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT