12/31/10 amount 12/31/11 amount Cost of Merchandise sold 172,900 160,600 Invento

Question

12/31/10 amount 12/31/11 amount

Cost of Merchandise sold 172,900 160,600

Inventory 18,000 12,000

Based on the information above, compute (a) Inventory turnover; (b) Average daily cost of merchandise sold; and (c) Number of days' sales in inventory for 2011. Use a 365-day year

If required, round your answers to two decimal places.

d. If an inventory turnover of 12 is average for the industry, how is this company doing?

a. Inventory turnover

b. Average daily cost of merchandise sold

c. Number of days' sales in inventory

Explanation / Answer

2010 2011 Inventory Turnover             9.61              13.38 Avg, Daily COSt of merchandise sold          473.70            440.00 No. of days of inventory            38.00              27.27 Co. is doing good in 2011 but poor in 2010

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