Cost of merchandise sold Inventory, beginning of year Inventory, end of year Kracker Corp. $32,850.0 1,908.9 1,871.1 Foodstuff Winston Inc. Stores $34,675.0 2,131.8 2,048.2 $35,405.0 1,498.7 1,411.3 a. & b. Determine the inventory turnover and the number of days' sales in inventory (use 365 days and round to the nearest day) for the three companies. Round all interim calculations to one decimal place. For days' sales in inventory, round final answers to the nearest day, and for inventory turnover, round to one decimal place. Company names Kracker Inventory Turnover 17.4 V Days' Sales in Inventory 21 days Foodstuff 16.6 Winston Stores 24.3 e. The inventory turnover ratios and days' sales in inventory are similar and a tower Stores in managing inventory. 22days 15 days ✔for Kracker and Foodstuff. Winston Stores has a higher days' sales in inventory than Kracker and Foodstuff. These results suggest that Kracker and Foodstuff are less. inventory turnove ✔efficient than Winston d. If Kracker had Winston Stores' days' sales in inventory, how much additional cash flow would have been generated from the smaller inventory relative to its actual average inventory position? Round interim calculations to one decimal place and your final answer to the nearest million. 1,352 X million
Cost of merchandise sold Inventory, beginning of year Inventory, end of year Kracker Corp. $32,850.0 1,908.9 1,871.1 Foodstuff Winston Inc. Stores $34,675.0 2,131.8 2,048.2 $35,405.0 1,498.7 1,411.3 a. & b. Determine the inventory turnover and the number of days' sales in inventory (use 365 days and round to the nearest day) for the three companies. Round all interim calculations to one decimal place. For days' sales in inventory, round final answers to the nearest day, and for inventory turnover, round to one decimal place. Company names Kracker Inventory Turnover 17.4 V Days' Sales in Inventory 21 days Foodstuff 16.6 Winston Stores 24.3 e. The inventory turnover ratios and days' sales in inventory are similar and a tower Stores in managing inventory. 22days 15 days ✔for Kracker and Foodstuff. Winston Stores has a higher days' sales in inventory than Kracker and Foodstuff. These results suggest that Kracker and Foodstuff are less. inventory turnove ✔efficient than Winston d. If Kracker had Winston Stores' days' sales in inventory, how much additional cash flow would have been generated from the smaller inventory relative to its actual average inventory position? Round interim calculations to one decimal place and your final answer to the nearest million. 1,352 X million
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Inventory Turnover and days' sales in inventory
Kracker Corp., Foodstuff, Inc., and Winston Stores, Inc. are three grocery chains in the United States. Inventory management is an important aspect of the grocery retail
business. Recent balance sheets for these three companies indicated the following merchandise inventory (in millions) information:
Cost of merchandise sold
Inventory, beginning of year
Inventory, end of year
Kracker
Corp.
$32,850.0
1,908.9
1,871.1
Foodstuff
Inc.
Stores in managing inventory.
$34,675.0
2,131.8
2,048.2
Winston
Stores
$35,405.0
1,498.7
1,411.3
a. & b. Determine the inventory turnover and the number of days' sales in inventory (use 365 days and round to the nearest day) for the three companies. Round all
interim calculations to one decimal place. For days' sales in inventory, round final answers to the nearest day, and for inventory turnover, round to one
decimal place.
Company names
Inventory Turnover
Kracker
17.4 V
Foodstuff
16.6 ✔
Winston Stores
24.3
c. The inventory turnover ratios and days' sales in inventory are similar
and a lower
Days' Sales in Inventory
21
days
22
days
15
days
✔for Kracker and Foodstuff. Winston Stores has a higher
✓days' sales in inventory than Kracker and Foodstuff. These results suggest that Kracker and Foodstuff are less
✓inventory turnover
✓efficient than Winston
d. If Kracker had Winston Stores' days' sales in inventory, how much additional cash flow would have been generated from the smaller inventory relative to its actual
average inventory position? Round interim calculations to one decimal place and your final answer to the nearest million.
1,352 X million
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