how does that performance compare with that of the industry? a) What was Organic Grocers' inventory turnover? times per year (round your response to two decimal places). b) How does Organic Grocers' performance compare with that of the industry? It is the industry. the same as better than
how does that performance compare with that of the industry? a) What was Organic Grocers' inventory turnover? times per year (round your response to two decimal places). b) How does Organic Grocers' performance compare with that of the industry? It is the industry. the same as better than
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Question
![**Inventory Turnover Analysis for Organic Grocers, Inc.**
The grocery industry has an annual inventory turnover of about 13 times. Organic Grocers, Inc., had a cost of goods sold last year of $10,960,000, with an average inventory of $991,710. This analysis seeks to determine Organic Grocers' inventory turnover and comparison with the industry standard.
### Questions:
**a) What was Organic Grocers' inventory turnover?**
- Insert your answer: ______ times per year (round your response to two decimal places).
**b) How does Organic Grocers' performance compare with that of the industry?**
- Choose one:
- the same as
- better than
- worse than
To calculate the inventory turnover of Organic Grocers, use the formula:
\[ \text{Inventory Turnover} = \frac{\text{Cost of Goods Sold}}{\text{Average Inventory}} \]
By applying the above formula, users can evaluate how often Organic Grocers replaces its inventory over a given period, comparing it to the industry's average turnover to gauge performance.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F990e2519-8241-488a-b2ee-5f9ae2efd0c7%2F0f8f8eff-dc05-41d6-8692-e54e93283336%2Fpvr6dm_processed.png&w=3840&q=75)
Transcribed Image Text:**Inventory Turnover Analysis for Organic Grocers, Inc.**
The grocery industry has an annual inventory turnover of about 13 times. Organic Grocers, Inc., had a cost of goods sold last year of $10,960,000, with an average inventory of $991,710. This analysis seeks to determine Organic Grocers' inventory turnover and comparison with the industry standard.
### Questions:
**a) What was Organic Grocers' inventory turnover?**
- Insert your answer: ______ times per year (round your response to two decimal places).
**b) How does Organic Grocers' performance compare with that of the industry?**
- Choose one:
- the same as
- better than
- worse than
To calculate the inventory turnover of Organic Grocers, use the formula:
\[ \text{Inventory Turnover} = \frac{\text{Cost of Goods Sold}}{\text{Average Inventory}} \]
By applying the above formula, users can evaluate how often Organic Grocers replaces its inventory over a given period, comparing it to the industry's average turnover to gauge performance.
Expert Solution
Step 1
Given :
Cost of goods sold (COGS) = 10960000
Average inventory (I) = 991710
Inventory turnover of industry = 13 times
To find :
Inventory turnover of Organic Grocer's and compare it with the industry inventory turnover
Step by step
Solved in 3 steps
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