Inventory turnover

In the 2014 fiscal year, Sleep Country’s inventory turnover ratio was 11.10 times, while in the 2015 fiscal year it was 11.27 times. Achieving a higher inventory turnover means that Sleep Country is able to improve inventory management and foster sales. The higher inventory ratio is complemented with an increase in sales, as the cost of goods sold increased approximately 12.54% from 2014 to the 2015 fiscal year. Sleep Country reported that direct expenses from inventory increased from 44.9% to 46.1% as a result of increased provisions of warranty. In addition, write-offs of inventory that have become damaged increased from $760 in 2014 to $874 in the 2015 fiscal year. Thus, with an increase in direct expenses from inventory from $178,932 in 2014 to $205,324 in 2015 and write-offs of inventory, the total cost of goods sold in the 2015 fiscal year increased (Annual Reports 2015, note 7). With a higher value in cost of goods sold, the inventory turnover ratio is slightly higher. Hence, Sleep Country is more efficient in turning over inventory in 2015 compared to the previous fiscal…

Inventory turnover measures the amount of times a company sells its average merchandise inventory during a year. We start with the cost of goods sold (the cost of merchandise inventory the business has sold to its customers) over the average merchandise inventory for the year. To find the average inventory, you would combine both 2013 and 2014 to find the 2014 average and combine 2012 to 2013 to find the average for 2013. Having a high turnover rate means the company is capable of selling…

The company that I chose to research is Deere & Company (DE). The companies sector is industrial goods and produces and sells farm and construction machinery. The three ratios that I believe are important in determining a company’s financial situation are the quick ratio, the inventory turnover ratio, and the net profit margin ratio. To find the quick ratio, we add cash, cash equivalents, short term investments and current receivables and divide them by the current liabilities. I found that…

With ABC in 2014 taking on average 64 days to sell its stock, it achieved a 5.7 times inventory turnover ratio (365 days divided by 64) which can be considered an appropriate for the company with similar nature of the business. Days debtors has been decreasing by one day on year by year basis since 2012. This would suggest that the company is getting better in collecting its debts. Section k in notes 1 of ABC’s annual report 2014 stipulates that ‘trade receivables are due for settlement no…

In the inventory turnover ratio, we discovered that this ratio can be compared to the industry average to find out if the company is doing well. Currently, communication services inventory is averaging about 44.16 . Verizon inventory turnover remain at 41.8 in 2013 and 45.6 in 2015. T-Mobile inventory turnover was relatively good in 2013 at 47.3 but their number has been dropping from 26.30 in 2014 and in 2015 is at 13.73, which is consider low. T-Mobile inventory turnover seem to support…

Efficiency Analysis Profitability is not the only metric by which a company’s performance is measured. By analysing efficiency ratios, an organisation is able to measure “how effectively certain resources have been utilised by the business” (Atrill, et al., 2015, p. 253). The monitoring of key internal activities, provides organisations with relevant data for comparison purposes, using benchmarks such as a previous financial periods, industry competitors or planned performance for evaluation…

Over the past five fiscal years, while Nordstrom has reflected a decline in their Inventory Turnover ratio, which reflects a company’s ability on average to sell and replace their inventory during the year, their ratio has remained well about the industry average of 3.91, with their inventory turnover ratio for the 2015 fiscal year being approximately 4.71. Thus, Nordstrom has been able to sell and replenish their goods frequently, which is a good thing because in the fashion industry, some…

in Time (JIT) inventory system in companies, as well as provide key examples of JIT. It is considered to be one of the best inventory management systems that there are. Due to the reliance that many companies have on JIT, it is important to realize the utilizations of the system and why it is commonly used. As well as, recognize potential weaknesses, and possible risk mitigation plans that companies can practice to avoid future problems with inventory management. JIT Key Elements We have all…

management of inventory for the year end 31 March 2016. This was done by calculating the financial ratios and analysing the income statement and balance sheet. All calculations can be found in the appendix. The report will pay particular attention to the liquidity, short-term debt-paying ability and three issues in relation to management of inventory including; inventory turnover, number of days in a selling period and gross profit percentage. The report will comment on these issues and provide…

This ratio is also known as as stock turnover ratio or inventory velocity. This ratio is calculated to don 't forget the adequacy of the quantum of capital and its justification for making an investment in stock or stock. stock turnover is used to degree the efficiency of sales. Inventory turnover is the wide variety of times received through dividing fee of sales with the aid of stock. (Average Inventory/Sales) x 365 for days (Average Inventory/Sales) x 52 …