The average number of inventory days outstanding for O Incorporation. Introduction: The average number of days a company can hold its stock in a business is termed as inventory days.

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Question

Chapter 26, Problem 16P

a)

Summary Introduction

To determine: The average number of inventory days outstanding for O Incorporation.

Introduction:

The average number of days a company can hold its stock in a business is termed as inventory days.

b)

Summary Introduction

To determine: The amount of investment should the company reduce in inventory.

Introduction:

Average inventory is the medium of the inventories during a particular period.

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Happy Valley Homecare Suppliers, Incorporated (HVHS), had $11.7 million in sales in 2015. Its cost of goods sold was $4.68 million, and its average inventory balance was $1.84 million. a. Calculate the average number of days inventory outstanding ratios for HVHS. b. The average number of inventory days in the industry is 73 days. By how much must HVHS reduce its investment in inventory to improve its inventory days to meet the industry? (Hint: Use a 365-day year.) a. Calculate the number of days inventory outstanding ratios for HVHS. The number of inventory days outstanding is days. (Round to two demical places.) b. The average number of inventory days in the industry is 73 days. By how much must HVHS reduce its investment in inventory to improve its inventory days to meet the industry? To match the industry average number of inventory days, HVHS would reduce its inventory by $ million. (Round to three decimal place.)

Happy Valley Homecare Suppliers, Incorporated (HVHS), had $13.6 million in sales in 2010. Its cost of goods sold was $5.44 million, and its average inventory balance was $1.67 million. a. Calculate the average number of days inventory outstanding ratios for HVHS. b. The average number of inventory days in the industry is 73 days. By how muchmust HVHS reduce its investment in inventory to improve its inventory days to meet the industry? (Hint: Use a 365-day year.)

Charlie’s Cycles Inc. has $110 million in sales. The companyexpects that its sales will increase 5% this year. Charlie’s CFO uses a simple linearregression to forecast the company’s inventory level for a given level of projected sales. On the basis of recent history, the estimated relationship between inventories and sales (inmillions of dollars) is as follows:Inventories = $9 + 0.0875(Sales)Given the estimated sales forecast and the estimated relationship between inventories andsales, what are your forecasts of the company’s year-end inventory level and its inventoryturnover ratio?

Answer 2

Question

Chapter 26, Problem 16P

a)

Summary Introduction

To determine: The average number of inventory days outstanding for O Incorporation.

Introduction:

The average number of days a company can hold its stock in a business is termed as inventory days.

b)

Summary Introduction

To determine: The amount of investment should the company reduce in inventory.

Introduction:

Average inventory is the medium of the inventories during a particular period.

Expert Solution & Answer

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Answer 3

Question

Chapter 26, Problem 16P

a)

Summary Introduction

To determine: The average number of inventory days outstanding for O Incorporation.

Introduction:

The average number of days a company can hold its stock in a business is termed as inventory days.

b)

Summary Introduction

To determine: The amount of investment should the company reduce in inventory.

Introduction:

Average inventory is the medium of the inventories during a particular period.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 26, Problem 16P

a)

Summary Introduction

To determine: The average number of inventory days outstanding for O Incorporation.

Introduction:

The average number of days a company can hold its stock in a business is termed as inventory days.

b)

Summary Introduction

To determine: The amount of investment should the company reduce in inventory.

Introduction:

Average inventory is the medium of the inventories during a particular period.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 5

Chapter 26, Problem 16P

a)

Summary Introduction

To determine: The average number of inventory days outstanding for O Incorporation.

Introduction:

The average number of days a company can hold its stock in a business is termed as inventory days.

b)

Summary Introduction

To determine: The amount of investment should the company reduce in inventory.

Introduction:

Average inventory is the medium of the inventories during a particular period.

Answer 6

Chapter 26, Problem 16P

a)

Summary Introduction

To determine: The average number of inventory days outstanding for O Incorporation.

Introduction:

The average number of days a company can hold its stock in a business is termed as inventory days.

Answer 7

Chapter 26, Problem 16P

a)

Summary Introduction

To determine: The average number of inventory days outstanding for O Incorporation.

Introduction:

The average number of days a company can hold its stock in a business is termed as inventory days.

Answer 8

b)

Summary Introduction

To determine: The amount of investment should the company reduce in inventory.

Introduction:

Average inventory is the medium of the inventories during a particular period.

Answer 9

b)

Summary Introduction

To determine: The amount of investment should the company reduce in inventory.

Introduction:

Average inventory is the medium of the inventories during a particular period.

Answer 10

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Answer 11

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Answer 13

Ch. 26.1 - What is the firms cash cycle? How does it differ...Ch. 26.1 - How does working capital impact a firms value?Ch. 26.2 - Prob. 1CC Ch. 26.2 - Prob. 2CC Ch. 26.3 - Prob. 1CC Ch. 26.3 - Prob. 2CC Ch. 26.4 - What is accounts payable days outstanding?Ch. 26.4 - What are the costs of stretching accounts payable?Ch. 26.5 - What are the benefits and costs of holding...Ch. 26.5 - Prob. 2CC

The average number of inventory days outstanding for O Incorporation. Introduction: The average number of days a company can hold its stock in a business is termed as inventory days.

Solution Summary: The author explains that the average number of inventory days outstanding for O Incorporation is 91.25 days.

Concept explainers

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To determine: The average number of inventory days outstanding for O Incorporation.

Introduction:

The average number of days a company can hold its stock in a business is termed as inventory days.

To determine: The amount of investment should the company reduce in inventory.

Introduction:

Average inventory is the medium of the inventories during a particular period.

Want to see the full answer?

Chapter 26 Solutions

The average number of inventory days outstanding for O Incorporation. Introduction: The average number of days a company can hold its stock in a business is termed as inventory days.

Solution Summary: The author explains that the average number of inventory days outstanding for O Incorporation is 91.25 days.

Concept explainers

Videos

To determine: The average number of inventory days outstanding for O Incorporation. Introduction: The average number of days a company can hold its stock in a business is termed as inventory days.

To determine: The amount of investment should the company reduce in inventory. Introduction: Average inventory is the medium of the inventories during a particular period.

Want to see the full answer?

Chapter 26 Solutions

To determine: The average number of inventory days outstanding for O Incorporation.

Introduction:

The average number of days a company can hold its stock in a business is termed as inventory days.

To determine: The amount of investment should the company reduce in inventory.

Introduction:

Average inventory is the medium of the inventories during a particular period.