Question

The financial statements of ConAgra Foods, Inc.’s 2017 annual report disclose the following information.

(in millions)		2017		2016		2015
Year-end inventories		$934.2		$1,044.1		$1,642.6
				Fiscal Year
				2017		2016
Net sales				$7,826.9		$8,664.1
Cost of goods sold				5,484.8		6,234.9
Net income				648.0		(665.9)

Compute ConAgra’s (a) inventory turnover and (b) the average days to sell inventory for 2017 and 2016. (Round inventory turnover to 1 decimal place, e.g. 7.6 and average days to sell inventory to 0 decimal places, e.g. 65.)

				2017			2016
(a)		Inventory turnover		enter the inventory turnover rounded to 1 decimal place	times		enter the inventory turnover rounded to 1 decimal place	times
(b)		Average days to sell inventory		enter the average days to sell inventory rounded to 0 decimal places	days		enter the average days to sell inventory rounded to 0 decimal places	days

Answer 1

	2017		2016
	Calculation	Answer	Calculation	Answer
Average inventories [ ( Beginning inventories + Ending inventories ) / 2 ]	( 1044.1 + 934.2 ) / 2	989.15	(1642.6 + 1044.1 ) / 2	1343.35

	2017		2016
	Calculation	Answer	Calculation	Answer
(a) Inventory turnover [ Cost of goods sold / Average inventories ]	( 5484.8 / 989.15 )	5.5 times	( 6234.9 / 1343.35 )	4.6 times
(b) Average days to sell inventory [ Days in a year / Inventory turnover ]	( 365 / 5.5 )	66 days	( 365 / 4.6 )	79 days