Exercise 6-11 Suppose this information is available for PepsiCo, Inc. for 2015,
ID: 2546115 • Letter: E
Question
Exercise 6-11 Suppose this information is available for PepsiCo, Inc. for 2015, 2016, and 2017 2015 2016 $2,300 2,300 2,700 2,500 17,746 20,428 19,777 39,771 42,885 43,668 2017 (in millions) Beginning inventory Ending inventory Cost of goods sold Sales revenue $1,900 $2,700 Calculate the inventory turnover for PepsiCo, Inc. for 2015, 2016, and 2017. (Round inventory t 2015 2016 2017 Inventory turnover times times times LINK TO TEXT Calculate the days in inventory for PepsiCo, Inc. for 2015, 2016, and 2017. (Round days in invento 2015 2016 2017 Days in inventory days days days LINK TO TEXTExplanation / Answer
y- 2015
y- 2016
y-2017
Beginning inventory
$1,900
$2,300
$2,700
Ending inventory
$2,300
$2,700
$2,500
Cost of goods sold
$17,746
$20,428
$19,777
Sales revenue
$39,771
$42,885
$43,668
Average inventory = (beg.inv+end,inv)/2
$2,100
$2,500
$2,600
1) inventory turnover ratio
=17,746/2,100
=20,428/2,500
=19,777/2,600
= cost of goods sold/average inventory
Inventory turnover ratio
=8.45 times
=8.17 times
=7.60 times
2)Days in inventory
= 365/8.45
= 365/8.17
=365/7.60
= 365/inventory turnover
Days in inventory
= 43 days
= 44.6 days
= 48 days
3) Gross profit rate
(39,771-17,746)/39,771
(42,885-20,428)/42,885
(43,668-19,777)/43,668
= (sales-cost of goods sold)/sales
Gross profit rate
= 55%
= 52.3%
= 54.71%
y- 2015
y- 2016
y-2017
Beginning inventory
$1,900
$2,300
$2,700
Ending inventory
$2,300
$2,700
$2,500
Cost of goods sold
$17,746
$20,428
$19,777
Sales revenue
$39,771
$42,885
$43,668
Average inventory = (beg.inv+end,inv)/2
$2,100
$2,500
$2,600
1) inventory turnover ratio
=17,746/2,100
=20,428/2,500
=19,777/2,600
= cost of goods sold/average inventory
Inventory turnover ratio
=8.45 times
=8.17 times
=7.60 times
2)Days in inventory
= 365/8.45
= 365/8.17
=365/7.60
= 365/inventory turnover
Days in inventory
= 43 days
= 44.6 days
= 48 days
3) Gross profit rate
(39,771-17,746)/39,771
(42,885-20,428)/42,885
(43,668-19,777)/43,668
= (sales-cost of goods sold)/sales
Gross profit rate
= 55%
= 52.3%
= 54.71%