Access the company’s investor relations website or the SEC's EDGAR database (www.sec.gov/edgar.shtml). Inventory Turnover Ratio Analysis: Calculate and interpret the Inventory Turnover ratio for a company of your choice that is listed on a major stock exchange (e.g., NYSE, NASDAQ). Begin by accessing the company's two (2) most recent Annual Reports (Form 10-K) from their investor relations website or the Securities and Exchange Commission's EDGAR database. Explain how to find and access this report. Then, calculate the Inventory Turnover ratio using the formula: Inventory Turnover=Cost of Goods SoldAverage InventoryInventory Turnover= Cost of Good Sold/Average Inventory Interpret what the ratio reveals about the company's efficiency in managing its inventory. Discuss factors that might influence the ratio and implications for the company’s operations. Days' Sales in Inventory (DSI) Calculation and Analysis: Define Days' Sales in Inventory (DSI) and explain its significance in evaluating how quickly a company converts inventory into sales. Access the same two (2) Annual Reports (Form 10-K) as in prompt 1. Calculate the DSI using the formula Days’ Sales in Inventory (DSI)= Ending Inventory/Cost of Goods Sold×365 Compare and contrast the insights provided by Inventory Turnover and DSI. How might these ratios be used by stakeholders such as investors or creditors?
Access the company’s investor relations website or the SEC's EDGAR database (www.sec.gov/edgar.shtml).
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Inventory Turnover Ratio Analysis: Calculate and interpret the Inventory Turnover ratio for a company of your choice that is listed on a major stock exchange (e.g., NYSE, NASDAQ). Begin by accessing the company's two (2) most recent Annual Reports (Form 10-K) from their investor relations website or the Securities and Exchange Commission's EDGAR database. Explain how to find and access this report. Then, calculate the Inventory Turnover ratio using the formula:
Inventory Turnover=Cost of Goods SoldAverage InventoryInventory Turnover= Cost of Good Sold/Average InventoryInterpret what the ratio reveals about the company's efficiency in managing its inventory. Discuss factors that might influence the ratio and implications for the company’s operations.
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Days' Sales in Inventory (DSI) Calculation and Analysis: Define Days' Sales in Inventory (DSI) and explain its significance in evaluating how quickly a company converts inventory into sales. Access the same two (2) Annual Reports (Form 10-K) as in prompt 1. Calculate the DSI using the formula
Days’ Sales in Inventory (DSI)= Ending Inventory/Cost of Goods Sold×365
Compare and contrast the insights provided by Inventory Turnover and DSI. How might these ratios be used by stakeholders such as investors or creditors?
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