FINANCIAL ACCOUNTING
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ISBN: 9781259964947
Author: Libby
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![**Aegis Industries Inc. Financial Analysis**
Aegis Industries Inc., a leading snowmobile manufacturer worldwide, presented the following financial data:
### Financial Statements (in millions)
| Year | Net Sales Revenue | Cost of Goods Sold | Average Inventory |
|------|-------------------|--------------------|-------------------|
| 2012 | $4,900 | $4,290 | $490 |
| 2013 | $4,360 | $3,810 | $440 |
| 2014 | $3,690 | $3,290 | $380 |
| 2015 | $3,270 | $2,870 | $370 |
### Required Calculations
1-a. **Inventory Turnover Ratio (2015, 2014, 2013):**
- Calculate the inventory turnover ratio to understand how efficiently the company manages its stock. Use the formula:
\[
\text{Inventory Turnover Ratio} = \frac{\text{Cost of Goods Sold}}{\text{Average Inventory}}
\]
1-b. **Average Days to Sell Inventory (2015, 2014, 2013):**
- Calculate the average number of days it takes to sell the inventory using the formula:
\[
\text{Average Days to Sell Inventory} = \frac{365}{\text{Inventory Turnover Ratio}}
\]
2. **Comparison with Competitor:**
- Evaluate Aegis' performance against Snow Pack Co., whose inventory turnover was 7.1 times, equating to 51.4 days to sell inventory in 2015. Both companies utilize the same inventory costing method (FIFO).
### Graph/Diagram:
The visual component at the bottom includes a chart to input calculated values for the requirements:
- A tabular entry point for Inventory Turnover Ratios for the years 2015, 2014, and 2013. It is structured with sections titled "Req 1A" and "Req 1B" for inputting respective calculations.
This analysis helps compare Aegis Industries Inc. with industry benchmarks and competitors for informed decision-making.](https://content.bartleby.com/qna-images/question/2bd93233-75ab-47a8-9b3f-39d1bbb35924/a5de3b55-24d1-49e5-afd4-f9e1a42c4237/1zng6t_processed.jpeg)
Transcribed Image Text:**Aegis Industries Inc. Financial Analysis**
Aegis Industries Inc., a leading snowmobile manufacturer worldwide, presented the following financial data:
### Financial Statements (in millions)
| Year | Net Sales Revenue | Cost of Goods Sold | Average Inventory |
|------|-------------------|--------------------|-------------------|
| 2012 | $4,900 | $4,290 | $490 |
| 2013 | $4,360 | $3,810 | $440 |
| 2014 | $3,690 | $3,290 | $380 |
| 2015 | $3,270 | $2,870 | $370 |
### Required Calculations
1-a. **Inventory Turnover Ratio (2015, 2014, 2013):**
- Calculate the inventory turnover ratio to understand how efficiently the company manages its stock. Use the formula:
\[
\text{Inventory Turnover Ratio} = \frac{\text{Cost of Goods Sold}}{\text{Average Inventory}}
\]
1-b. **Average Days to Sell Inventory (2015, 2014, 2013):**
- Calculate the average number of days it takes to sell the inventory using the formula:
\[
\text{Average Days to Sell Inventory} = \frac{365}{\text{Inventory Turnover Ratio}}
\]
2. **Comparison with Competitor:**
- Evaluate Aegis' performance against Snow Pack Co., whose inventory turnover was 7.1 times, equating to 51.4 days to sell inventory in 2015. Both companies utilize the same inventory costing method (FIFO).
### Graph/Diagram:
The visual component at the bottom includes a chart to input calculated values for the requirements:
- A tabular entry point for Inventory Turnover Ratios for the years 2015, 2014, and 2013. It is structured with sections titled "Req 1A" and "Req 1B" for inputting respective calculations.
This analysis helps compare Aegis Industries Inc. with industry benchmarks and competitors for informed decision-making.
![**Aegis Industries Inc. Financial Summary (2012-2015)**
Aegis Industries Inc. is recognized as the largest snowmobile manufacturer globally. Below are key financial figures reported in millions:
| Year | Net Sales Revenue | Cost of Goods Sold | Average Inventory |
|------|------------------|-------------------|------------------|
| 2012 | $4,990 | $4,290 | 490 |
| 2013 | $4,360 | $3,810 | 440 |
| 2014 | $3,690 | $3,290 | 380 |
| 2015 | $3,270 | $2,870 | 370 |
### Required Analysis:
1. **Inventory Turnover Ratio Calculation:**
- Determine the inventory turnover ratio for the years 2015, 2014, and 2013.
2. **Average Days to Sell Inventory:**
- Calculate the average days it takes to sell inventory for the years 2015, 2014, and 2013 using a 365-day year, and provide answers rounded to one decimal place.
3. **Performance Comparison:**
- Compare Aegis Industries Inc. with its competitor, Snow Pack Corporation, which reported an inventory turnover of 7.1 times in 2015 (equivalent to 51.4 days to sell). Both companies use the FIFO inventory costing method.
### Calculating Inventory Turnover Ratio and Days to Sell:
- **Inventory Turnover Ratio:** This measures how often a company sells and replaces its inventory within a period. It is calculated using the formula:
\[
\text{Inventory Turnover Ratio} = \frac{\text{Cost of Goods Sold}}{\text{Average Inventory}}
\]
- **Average Days to Sell Inventory:** Reflects the average number of days taken to sell the entire inventory:
\[
\text{Average Days to Sell} = \frac{365}{\text{Inventory Turnover Ratio}}
\]
### Data Inputs for Evaluation:
- Tabs provided to input calculated results.
- Assess whether Aegis is outperforming its competitor based on the turnover ratios and days to sell inventory.
Complete this task using the placeholders specified in the tabs.](https://content.bartleby.com/qna-images/question/2bd93233-75ab-47a8-9b3f-39d1bbb35924/a5de3b55-24d1-49e5-afd4-f9e1a42c4237/l9rrhnb_processed.jpeg)
Transcribed Image Text:**Aegis Industries Inc. Financial Summary (2012-2015)**
Aegis Industries Inc. is recognized as the largest snowmobile manufacturer globally. Below are key financial figures reported in millions:
| Year | Net Sales Revenue | Cost of Goods Sold | Average Inventory |
|------|------------------|-------------------|------------------|
| 2012 | $4,990 | $4,290 | 490 |
| 2013 | $4,360 | $3,810 | 440 |
| 2014 | $3,690 | $3,290 | 380 |
| 2015 | $3,270 | $2,870 | 370 |
### Required Analysis:
1. **Inventory Turnover Ratio Calculation:**
- Determine the inventory turnover ratio for the years 2015, 2014, and 2013.
2. **Average Days to Sell Inventory:**
- Calculate the average days it takes to sell inventory for the years 2015, 2014, and 2013 using a 365-day year, and provide answers rounded to one decimal place.
3. **Performance Comparison:**
- Compare Aegis Industries Inc. with its competitor, Snow Pack Corporation, which reported an inventory turnover of 7.1 times in 2015 (equivalent to 51.4 days to sell). Both companies use the FIFO inventory costing method.
### Calculating Inventory Turnover Ratio and Days to Sell:
- **Inventory Turnover Ratio:** This measures how often a company sells and replaces its inventory within a period. It is calculated using the formula:
\[
\text{Inventory Turnover Ratio} = \frac{\text{Cost of Goods Sold}}{\text{Average Inventory}}
\]
- **Average Days to Sell Inventory:** Reflects the average number of days taken to sell the entire inventory:
\[
\text{Average Days to Sell} = \frac{365}{\text{Inventory Turnover Ratio}}
\]
### Data Inputs for Evaluation:
- Tabs provided to input calculated results.
- Assess whether Aegis is outperforming its competitor based on the turnover ratios and days to sell inventory.
Complete this task using the placeholders specified in the tabs.
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