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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 Foodstuff Kracker Corp. Winston Stores $33,580.0 $33,215.0 1,951.3 2,042.0 1,912.7 1,962.0 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 Foodstuff Inc. Inventory Turnover 17.4 16.6 Winston Stores 24.3 V $35,405.0 1,498.7 1,411.3 Days' Sales in Inventory 21 days 22✔ days ✓ days 15 c. The inventory turnover ratios and days' sales in inventory are similar ✔for Kracker and Foodstuff. Winston Stores has a higher V inventory turnover and a lower ✓days' sales in inventory than Kracker and Foodstuff. These results suggest that Kracker and Foodstuff are less ✔efficient than Winston Stores in managing inventory. 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. 550 X million

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 Foodstuff Kracker Corp. Winston Stores $33,580.0 $33,215.0 1,951.3 2,042.0 1,912.7 1,962.0 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 Foodstuff Inc. Inventory Turnover 17.4 16.6 Winston Stores 24.3 V $35,405.0 1,498.7 1,411.3 Days' Sales in Inventory 21 days 22✔ days ✓ days 15 c. The inventory turnover ratios and days' sales in inventory are similar ✔for Kracker and Foodstuff. Winston Stores has a higher V inventory turnover and a lower ✓days' sales in inventory than Kracker and Foodstuff. These results suggest that Kracker and Foodstuff are less ✔efficient than Winston Stores in managing inventory. 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. 550 X million

Financial Accounting
Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter7: Inventories
Section: Chapter Questions
Problem 7CP
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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. $33,580.0 1,951.3 1,912.7 Foodstuff Foodstuff Inc. $33,215.0 2,042.0 1,962.0 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 ✔ Winston Stores 16.6 ✔ 24.3 ✓ $35,405.01 1,498.7 1,411.3 ✓days ✓days Winston Stores c. The inventory turnover ratios and days' sales in inventory are similar ✓ for Kracker and Foodstuff. Winston Stores has a higher V inventory turnover and a lower days' sales in inventory than Kracker and Foodstuff. These results suggest that Kracker and Foodstuff are less ✔efficient than Winston Stores in managing inventory. Days' Sales in Inventory 21 ✔ days 22 15 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. 550 X million
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. $33,580.0 1,951.3 1,912.7 Foodstuff Foodstuff Inc. $33,215.0 2,042.0 1,962.0 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 ✔ Winston Stores 16.6 ✔ 24.3 ✓ $35,405.01 1,498.7 1,411.3 ✓days ✓days Winston Stores c. The inventory turnover ratios and days' sales in inventory are similar ✓ for Kracker and Foodstuff. Winston Stores has a higher V inventory turnover and a lower days' sales in inventory than Kracker and Foodstuff. These results suggest that Kracker and Foodstuff are less ✔efficient than Winston Stores in managing inventory. Days' Sales in Inventory 21 ✔ days 22 15 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. 550 X million
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