Wilkins Manufacturing has ar and a gross profit margin of inventories are Quarter Inventory 1.. $ 400,000

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Wilkins Manufacturing has annual sales of $4 million
and a gross profit margin of 40%. Its end-of-quarter
inventories are
Quarter Inventory
1 . $ 400,000
..... ...
2.. 800,000
..... ...
3 . . 1,200,000
3........
4.. 200,000
a. Find the average quarterly inventory and use it to
calculate the firm's inventory turnover and the
average age of inventory.
b. Assuming that the company is in an industry with
an average inventory turnover of 2.0, how would you
evaluate the activity of Wilkins' inventory?
Transcribed Image Text:Wilkins Manufacturing has annual sales of $4 million and a gross profit margin of 40%. Its end-of-quarter inventories are Quarter Inventory 1 . $ 400,000 ..... ... 2.. 800,000 ..... ... 3 . . 1,200,000 3........ 4.. 200,000 a. Find the average quarterly inventory and use it to calculate the firm's inventory turnover and the average age of inventory. b. Assuming that the company is in an industry with an average inventory turnover of 2.0, how would you evaluate the activity of Wilkins' inventory?
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