Inventory analysis QT, Inc. and Elppa Computers, Inc. compete with each other in the personal computer market. QT assembles computers to customer orders, building and delivering a computer within four days of a customer entering an order online. Elppa, on the other hand, builds computers for inventory prior to receiving an order. These computers are sold from inventory once an order is received. Selected financial information for both companies from recent financial statements follows (in millions): QT Elppa $56,940 $120,357 44,754 92,385 1,382 6,317 1,404 7,490 a. Determine for both companies (1) the inventory turnover and (2) the days' sales in inventory. Round your calculations and answers to one decimal place. Assume 365 days a year. QT Elppa Sales Cost of goods sold Inventory, beginning of period Inventory, end of period 1. Inventory turnover 2. Days' sales in inventory b. QT has a much higher smaller strategy. days days ✓ inventory turnover ratio than does Elppa. Likewise, QT has a much ✔ days' sales in inventory. These significant differences are a result of QT's make-to-order

Inventory analysis QT, Inc. and Elppa Computers, Inc. compete with each other in the personal computer market. QT assembles computers to customer orders, building and delivering a computer within four days of a customer entering an order online. Elppa, on the other hand, builds computers for inventory prior to receiving an order. These computers are sold from inventory once an order is received. Selected financial information for both companies from recent financial statements follows (in millions): QT Elppa $56,940 $120,357 44,754 92,385 1,382 6,317 1,404 7,490 a. Determine for both companies (1) the inventory turnover and (2) the days' sales in inventory. Round your calculations and answers to one decimal place. Assume 365 days a year. QT Elppa Sales Cost of goods sold Inventory, beginning of period Inventory, end of period 1. Inventory turnover 2. Days' sales in inventory b. QT has a much higher smaller strategy. days days ✓ inventory turnover ratio than does Elppa. Likewise, QT has a much ✔ days' sales in inventory. These significant differences are a result of QT's make-to-order

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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