Inventory turnover ratio: Inventory turnover ratio is used to determine the number of times inventory used or sold during the particular accounting period. The formula to calculate the inventory turnover ratio is as follows: Inventory turnover = Cost of goods sold Average inventory 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. The formula to calculate the days’ sales in inventory ratio is as follows: Days' sales in inventory = Days in accounting period Inventory turnover inventory turnover for 2016 and 2015.
Inventory turnover ratio: Inventory turnover ratio is used to determine the number of times inventory used or sold during the particular accounting period. The formula to calculate the inventory turnover ratio is as follows: Inventory turnover = Cost of goods sold Average inventory 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. The formula to calculate the days’ sales in inventory ratio is as follows: Days' sales in inventory = Days in accounting period Inventory turnover inventory turnover for 2016 and 2015.
Solution Summary: The author explains the inventory turnover ratio, which is used to determine the number of times inventory used or sold during the particular accounting period.
Inventory turnover ratio: Inventory turnover ratio is used to determine the number of times inventory used or sold during the particular accounting period. The formula to calculate the inventory turnover ratio is as follows:
Inventory turnover=Cost of goods soldAverage inventory
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. The formula to calculate the days’ sales in inventory ratio is as follows:
Days' sales in inventory=Days in accounting periodInventory turnover
inventory turnover for 2016 and 2015.
(b)
To determine
Days’ sales in inventory ratio for 2016 and 2015.
(c)
To determine
To explain: if change in turnover and days’ sales in inventory from 2015 to 2016 indicate favorable or unfavorable trend.
Provide correct option general accounting question
For this year, Jackson Enterprises has $25,000 net earnings on the income statement and $10,000 net cash inflow from operating activities, $18,000 net cash outflow from investing activities, and $22,000 cash inflow from financing activities on the statement of cash flows. What is the accruals total reported for this period?
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.