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Calculating Gross Profit Margin and Inventory Turnover The following table presents sales revenue, cost of goods sold, and inventory amounts for three specialty retailers, Tiffany & Co., Best Buy, and RH. 2017 2016 ($ millions) Tiffany & Co. Revenues Cost of goods sold Inventory Best Buy Revenues $42,151 $39,403 Cost of goods sold 32,275 29,963 Inventory 5,209 4,864 RH $4,170 $4,002 1,565 1,512 2,254 2,158 Revenues Cost of goods sold Inventory $2,440 $2,135 1,591 1,455 527 752 a. Compute the gross profit margin (GPM) for each of these companies for 2017 and 2016. Note: Round GPM answers to one decimal place (ex: 0.2345=23.5%). Best Buy Tiffany & Co. 2017 2016 Gross profit Gross profit margin (GPM) % Inventory turnover Avg. inventory days outstanding 2017 2016 % 2017 RH % 2016 % b. Compute the inventory turnover ratio and the average inventory days outstanding for 2017 for each company. Do not round until your final answer. Round inventory turnover to one decimal place. Round average inventory days outstanding to nearest whole number. Tiffany Best Buy RH

Calculating Gross Profit Margin and Inventory Turnover The following table presents sales revenue, cost of goods sold, and inventory amounts for three specialty retailers, Tiffany & Co., Best Buy, and RH. 2017 2016 ($ millions) Tiffany & Co. Revenues Cost of goods sold Inventory Best Buy Revenues $42,151 $39,403 Cost of goods sold 32,275 29,963 Inventory 5,209 4,864 RH $4,170 $4,002 1,565 1,512 2,254 2,158 Revenues Cost of goods sold Inventory $2,440 $2,135 1,591 1,455 527 752 a. Compute the gross profit margin (GPM) for each of these companies for 2017 and 2016. Note: Round GPM answers to one decimal place (ex: 0.2345=23.5%). Best Buy Tiffany & Co. 2017 2016 Gross profit Gross profit margin (GPM) % Inventory turnover Avg. inventory days outstanding 2017 2016 % 2017 RH % 2016 % b. Compute the inventory turnover ratio and the average inventory days outstanding for 2017 for each company. Do not round until your final answer. Round inventory turnover to one decimal place. Round average inventory days outstanding to nearest whole number. Tiffany Best Buy RH

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Calculating Gross Profit Margin and Inventory Turnover The following table presents sales revenue, cost of goods sold, and inventory amounts for three specialty retailers, Tiffany & Co., Best Buy, and RH. 2017 2016 ($ millions) Tiffany & Co. Revenues Cost of goods sold Inventory Best Buy Revenues $42,151 $39,403 Cost of goods sold 32,275 29,963 Inventory 5,209 4,864 RH $4,170 $4,002 1.565 1,512 2,254 2,158 Revenues Cost of goods sold Inventory $2,440 $2,135 1,591 1,455 527 752 a. Compute the gross profit margin (GPM) for each of these companies for 2017 and 2016. Note: Round GPM answers to one decimal place (ex: 0.2345 = 23.5%). Tiffany & Co. Best Buy Gross profit Gross profit margin (GPM) $ 2017 Inventory turnover Avg. inventory days outstanding % $ 2016 % $ 2017 %6 $ 2016 $ 2017 RH % $ 2016 % b. Compute the inventory turnover ratio and the average inventory days outstanding for 2017 for each company. Do not round until your final answer. Round inventory turnover to one decimal place. Round average inventory days outstanding to nearest whole number. Tiffany Best Buy RH
Transcribed Image Text:Calculating Gross Profit Margin and Inventory Turnover The following table presents sales revenue, cost of goods sold, and inventory amounts for three specialty retailers, Tiffany & Co., Best Buy, and RH. 2017 2016 ($ millions) Tiffany & Co. Revenues Cost of goods sold Inventory Best Buy Revenues $42,151 $39,403 Cost of goods sold 32,275 29,963 Inventory 5,209 4,864 RH $4,170 $4,002 1.565 1,512 2,254 2,158 Revenues Cost of goods sold Inventory $2,440 $2,135 1,591 1,455 527 752 a. Compute the gross profit margin (GPM) for each of these companies for 2017 and 2016. Note: Round GPM answers to one decimal place (ex: 0.2345 = 23.5%). Tiffany & Co. Best Buy Gross profit Gross profit margin (GPM) $ 2017 Inventory turnover Avg. inventory days outstanding % $ 2016 % $ 2017 %6 $ 2016 $ 2017 RH % $ 2016 % b. Compute the inventory turnover ratio and the average inventory days outstanding for 2017 for each company. Do not round until your final answer. Round inventory turnover to one decimal place. Round average inventory days outstanding to nearest whole number. Tiffany Best Buy RH
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