Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)
8th Edition
ISBN: 9781285065137
Author: Eugene F. Brigham, Joel F. Houston
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 4, Problem 2DQ
Summary Introduction
To identify: The inventory turnover ratios of HP over years.
Inventory Turnover ratio:
Inventory turnover ratio refers to the times the inventory is in comparison with the turnover. Inventory turnover ratio is computed to analyze the ability of a company to convert the inventory into sale.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Explain the purpose of the inventory turnover ratio?
Is it possible for a firm to have a high current ratio and still have difficulty paying its current bills? Why or why not?
How can accounting keep up with the rising sales return rates, especially when it comes to inventory management?
What does a very high inventory turnover ratio signify? Please provide your own example to explain your point.
Chapter 4 Solutions
Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)
Ch. 4 - Financial ratio analysis is conducted by three...Ch. 4 - Prob. 2QCh. 4 - Over the past year, M.D. Ryngaert Co. had an...Ch. 4 - Profit margins and turnover ratios vary from one...Ch. 4 - How does inflation distort ratio analysis...Ch. 4 - Prob. 6QCh. 4 - Give some examples that illustrate how (a)...Ch. 4 - Why is it sometimes misleading to compare a...Ch. 4 - Suppose you were comparing a discount merchandiser...Ch. 4 - Prob. 10Q
Ch. 4 - Differentiate between ROE and ROIC.Ch. 4 - Indicate the effects of the transactions listed in...Ch. 4 - DAYS SALES OUTSTANDING Baker Brothers has a DSO of...Ch. 4 - DEBT TO CAPITAL RATIO Bartley Barstools has a...Ch. 4 - DuPONT ANALYSIS Doublewide Dealers has an ROA of...Ch. 4 - MARKET/BOOK RATIO Jaster Jets has 10 billion in...Ch. 4 - PRICE/EARNINGS RATIO A company has an EPS of 2.00,...Ch. 4 - DuPONT AND ROE A firm has a profit margin of 2%...Ch. 4 - ROE AND ROIC Hilyard Industries net income is...Ch. 4 - DuPONT AND NET INCOME Ebersoll Mining has 6...Ch. 4 - BEP, ROE, AND ROIC Duval Manufacturing recently...Ch. 4 - Prob. 10PCh. 4 - RATIO CALCULATIONS Assume the following...Ch. 4 - Prob. 12PCh. 4 - TIE AND ROIC RATIOS The H.R. Pickett Corp. has...Ch. 4 - RETURN ON EQUITY Midwest Packagings ROH last year...Ch. 4 - RETURN ON EQUITY AND QUICK RATIO Lloyd Inc. has...Ch. 4 - Prob. 16PCh. 4 - CONCEPTUAL: RETURN ON EQUITY Which of the...Ch. 4 - TIE RATIO AEI Incorporated has 5 billion in...Ch. 4 - CURRENT RATIO The Petry Company has 1312,500 in...Ch. 4 - DSO AND ACCOUNTS RECEIVABLE Harrelson Inc....Ch. 4 - P/E AND STOCK PRICE Fontaine Inc. recently...Ch. 4 - Prob. 22PCh. 4 - RATIO ANALYSIS Data for Barry Computer Co. and its...Ch. 4 - DUPONT ANALYSIS A firm has been experiencing low...Ch. 4 - Prob. 25SPCh. 4 - Prob. 26ICCh. 4 - Prob. 1DQCh. 4 - Prob. 2DQCh. 4 - Construct a DuPont analysis for Hewlett Packard...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- If one firm is growing rapidly and another is not, how might this distort a comparisonof their inventory turnover ratios?arrow_forwardA high inventory turnover ratio provides evidence that a company is having problems with stockouts and disgruntled customers. Do you agree? Explain.arrow_forwardWhy is inventory management vital to the financial health of most firms?arrow_forward
- What insights can be gained from inventory ratio analysis, such as inventory turnover ratio and number of days sales in inventory ratio?arrow_forwardIn calculating inventory turnover, why is cost of goods sold used as the numerator? As the inventory turnover increases, what increasing risk does the business assume?arrow_forwardLike many technology companies, TechnoTools operates in an environment of decliningprices. Its reported profits will tend to be highest if it accounts for inventory using the:A. FIFO method.B. LIFO method.C. weighted average cost method.arrow_forward
- What does the inventory turnover period ratio measure? Select one: a.Profitability. b.The average time an organisation holds inventory. c.The liquidity of the firm. d.How much the firm's current assets could decrease and still leave it able to pay its current liabilities.arrow_forwardWhich of the following statements is most correct? Select one: A. A company with a current ratio of 0.5, should purchase additional inventory on credit if it wants to improve this ratio. B. Return on assets is a function of two variables, the profit margin and current asset turnover. C. A company with a current ratio of 0. 5, should sell some of the existing inventory at cost if it wants to improve this ratio. D. Firms with low rates of return on stockholders’ equity tend to sell at relatively high ratios of market price to book value.arrow_forwardIdentify which of the statements below are true (T) or false (F). Lean businesses aim to: Reduce inventory levelsarrow_forward
- answer these question in just two sentences. a..“If a firm sold some inventory on credit, its current ratio would probably not change much, but its quick ratio would increase.” If it is possible give reason in two sentences. b. In general, it's better to have a low inventory turnover ratio than a high one, as a low ratio indicates that the firm has an adequate stock of inventory relative to sales and thus will not lose sales as a result of running out of stock. If it is false give reason in two sentences. c. “It is appropriate to use the fixed assets turnover ratio to appraise firms' effectiveness in managing their fixed assets if and only if all the firms being compared have the same proportion of fixed assets to total assets.” If you are not agreed with this statement give justification in two sentences.arrow_forwardWhat is inventory turnover Ratio? Explain its significance.arrow_forwardDefine Inventory Turnover? Explain what the results mean and provide an example.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Fundamentals of Financial Management, Concise Edi...FinanceISBN:9781285065137Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage LearningManagerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage LearningPrinciples of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
- Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College PubEBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
Fundamentals of Financial Management, Concise Edi...
Finance
ISBN:9781285065137
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Inventory management; Author: The Finance Storyteller;https://www.youtube.com/watch?v=DZhHSR4_9B4;License: Standard Youtube License