Problem 1216 Part Level Submission The following information

Problem 12-16 (Part Level Submission) The following information (in $ millions) was taken from the recent annual reports of two companies. Cost of goods sold Average inventory Company A Company B $24,140 $5,358 $28,821 $2,617 (a1) Your answer is correct. Calculate each company\'s inventory turnover. (Round answers to 1 decimal place, e.g. 2.5.) Company A Company B 11.01 4.51 Inventory turnover times times Click if you would like to Show Work for this question: Open Show Work

Solution

Company A

Company B

Cost of goods sold

28821

24140

Average Inventory

2617

5358

a 1 ) Inventory Turnover = Cost of goods sold / average inventory

=28821/2617

=11.01 times

=24140/5358

=4.51 times

a 2 ) Average days to sell Inventory = Total number of days in a year / Inventory Turnover ratio

=365/11.01

=33 days

=365/4.51

= 81 days

	Company A	Company B
Cost of goods sold	28821	24140
Average Inventory	2617	5358
a 1 ) Inventory Turnover = Cost of goods sold / average inventory	=28821/2617 =11.01 times	=24140/5358 =4.51 times
a 2 ) Average days to sell Inventory = Total number of days in a year / Inventory Turnover ratio	=365/11.01 =33 days	=365/4.51 = 81 days