Inventory turnover

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  • Inventory Turnover Ratio

    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…

    Words: 938 - Pages: 4
  • Summary Of Ibm's Inventory Turnover

    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…

    Words: 975 - Pages: 4
  • Deere & Company: Inventory Turnover Ratio

    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…

    Words: 530 - Pages: 3
  • Inventory Turnover Ratios

    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…

    Words: 738 - Pages: 3
  • Verizon Ratio Analysis

    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…

    Words: 1045 - Pages: 4
  • Just In Time Inventory System

    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…

    Words: 2008 - Pages: 9
  • Aristocrat Leisure Limited: Case Study

    Operational Efficiency (Appendices 3) The management activities of operating asset are the most importance factors in the field of profit and loss. The main business activities in the management of asset are total inventory and asset management and so on. Inventory is very important, because it is the fastest flow of assets into cash in a normal business process, and fundamentally affects the cash flow Inventory turnover measures the conversion speed between inventory and sales and is defined by…

    Words: 712 - Pages: 3
  • Liquidity Ratios In Tal Lanka Hotels And Sigirinka Hotels PLC

    When compare Tal Lanka Hotels PLC’s stock turnover period with Sigiriya Village Hotels PLC, it seems that Tal Lanka Hotels PLC’s stock management strategies are highly efficient. It is recommended to match stock management strategies with customer demand. Because unnecessary stock holding leads to higher stock holding cost and damage to stock. Whereas holding less stock level creates problems in customer demand. c) Debtor turnover…

    Words: 1304 - Pages: 6
  • Adani Power Ratio Analysis

    assets of a company. The debt to asset ratio of Adani has decreased over the 3 years. The total asset base of Adani Power has increased from 38779.10 Crore to 42045.11 Crore whereas the Long term debt has been reduced from 17603.16 Crore to 14801.12 this has led to decrease in the debt to asset ratio of Adani. INTEREST COVERAGE RATIO The Interest Coverage ratio measures the ability of the company to pay the interest on its current obligations. It shows whether the company shall be able to meet…

    Words: 749 - Pages: 3
  • Japheth Enterprises

    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…

    Words: 1198 - Pages: 5
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