Consider the following information for two companies in 2023: Company A Sales Cost of goods sold Average inventory $442,592 211,589 142,726 Company B $324,835 157,780 112,300 Based only on gross profit margin and days inventory outstanding, Enter 1 if Company A is more efficient with its inventory and more profitable selling it than Company B. Enter 2 if Company A is more efficient with its inventory but less profitable selling it than Company B. Enter 3 if Company A is less efficient with its inventory but more profitable selling it than Company B. Enter 4 if Company A is less efficient with its inventory and less profitable selling it than Company B.
Consider the following information for two companies in 2023: Company A Sales Cost of goods sold Average inventory $442,592 211,589 142,726 Company B $324,835 157,780 112,300 Based only on gross profit margin and days inventory outstanding, Enter 1 if Company A is more efficient with its inventory and more profitable selling it than Company B. Enter 2 if Company A is more efficient with its inventory but less profitable selling it than Company B. Enter 3 if Company A is less efficient with its inventory but more profitable selling it than Company B. Enter 4 if Company A is less efficient with its inventory and less profitable selling it than Company B.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Consider the following information for two companies in 2023:
Company A
Sales
Cost of goods sold
Average inventory
$442,592
211,589
142,726
Company B
$324,835
157,780
112,300
Based only on gross profit margin and days inventory outstanding,
Enter 1 if Company A is more efficient with its inventory and more profitable
selling it than Company B.
Enter 2 if Company A is more efficient with its inventory but less profitable
selling it than Company B.
Enter 3 if Company A is less efficient with its inventory but more profitable
selling it than Company B.
Enter 4 if Company A is less efficient with its inventory and less profitable
selling it than Company B.
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