Question

Real World Financials The table below contains selected information from recent financial statements of Green and White, two companies in the home improvement retail Industry ($ in millions): Net sales Cost of goods sold Year-end inventory Green 1/28/2018 1/29/2017 $102,504 $96,195 68,148 63,882 White 2/2/2018 2/3/2017 $70,219 $66,617 46,810 44,153 12,993 12,058 14,348 14,149 Required: Calculate the gross profit ratio, the inventory turnover ratio, and the average days in Inventory for the two companies for their fiscal years ending in 2018. (Use 365 days a year. Round "Inventory turnover ratio" to 2 decimal places. Enter dollar amounts in millions rounded to the nearest whole number.) Gross Profit Ratio Choose Denominator: Gross Profit Ratio Choose Numerator: Gross profit ratio Green White 0 % 0 % Inventory Turnover Ratio Choose Denominator: = Choose Numerator: Inventory Turnover Ratio Inventory turnover ratio times 0 times Green

Answer 1

Answer = Gross Profit Ratio Choose Numerator 17 Choose Denominator Gross Profit Net Sales $34,356 $102,504 $23,409 $70,219 Gross Profit Ratio Gross Profit Ratio 33.5% Green White 33.3% Gross Profit = Net Sales - Cost of Goods Sold Green = $102,504 - $68,148 = $34,356 White = $70,219 - $46,810 = $23,409 Inventory Turnover Ratio Choose Numerator 17 Choose Denominator Cost of Goods Sold / Average Inventory Green $68,148 $14,249 White $46,810 $12,526 Avergage Inventory = (Beginning Inventory + Ending Inventory)/2 Green = ($14,149 + $14,348)/2 = $14,248.50 White = ($12,058 + $12,993)/2 = $12,525.50 Invetory Turnover Ratio Invetory Turnover Ratio 4.78 times 3.74 times Average Days in Inventory Choose Numerator / Choose Denominator = Number of Days in Year / Invetory Turnover Ratio = 365 4.78 365 3.74 Invetory Turnover Ratio Invetory Turnover Ratio Days Days Green White