Admiral Company and Corporal, Inc., compete against each other in general merchandise retailing tations, pharmacies, and optical centers. Below is selected financial information for both compani recent year's financial statements (in millions) Sales Cost of goods sold Inventory, beginning of period Admiral Company $30,660 25,550 791 Corporal, Inc. 791 $38,700 36,500 3,210 Inventory, end of period . Determine for both companies (1) the inventory turnover and (2) the days' sales in inventory. Ro 3,810
Admiral Company and Corporal, Inc., compete against each other in general merchandise retailing tations, pharmacies, and optical centers. Below is selected financial information for both compani recent year's financial statements (in millions) Sales Cost of goods sold Inventory, beginning of period Admiral Company $30,660 25,550 791 Corporal, Inc. 791 $38,700 36,500 3,210 Inventory, end of period . Determine for both companies (1) the inventory turnover and (2) the days' sales in inventory. Ro 3,810
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Admiral Company and Corporal, Inc., compete against each other in general merchandise retailing, gas
stations, pharmacies, and optical centers. Below is selected financial information for both companies from
a recent year's financial statements (in millions)
Sales
Cost of goods sold
Inventory, beginning
of period
Inventory, end of
period
Admiral
Company
$30,660
25,550
791
791
Corporal,
Inc.
$38,700
36,500
Admiral
fill in the blank 1
fill in the blank 3
3,210
3,810
a. Determine for both companies (1) the inventory turnover and (2) the days' sales in inventory. Round to
one decimal place.
Corporal
fill in the blank 2
fill in the blank 4
1. Inventory turnover
2. Days' sales in inventory
days
b. All of the following are true of Admiral's strategy except:
1.This strategy results in a higher inventory turnover ratio than the strategy used by Corporal.
2. This strategy results in a smaller days' sales in inventory than the strategy used by Corporal.
3. This strategy embraces the ability to serve customers with newer technology than the Corporal
strategy.
4. This strategy results in greater obsolescence risk than that used by Corporal.
days
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