Concept explainers
(a) (1)
Annual Report is a comprehensive financial report that shows all the business activities, that takes place throughout the previous financial year. Its purpose is to provide the complete information of a company’s financial activities, to its users in order to help them analyze, and take well informed decisions.
To Compute: The inventory turnover and days in inventory of Company A, and Company WM for 2014.
(2)
Days’ sales in inventory: Days’ sales in inventory are used to determine number of days a particular company takes to make sales of the inventory available with them.
Days' sales in inventory=Days in accounting periodInventory turnover
To Compute: The days in inventory of Company A, and Company WM for 2014.
(b)
To Describe: The conclusions concerning the management of the inventory can be drawn from the above data.
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Chapter 6 Solutions
Financial Accounting: Tools for Business Decision Making, 8th Edition
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