5. A firm has Cost of Goods Sold (COGS) equal to $230 million and average Inventory...

Question

Question

Answer 1

Answer #1

(a) Inventory Turnover = COGS/Average Inventory = 230/180 = 1.2778 = 1.28 times

(b) Higher the inventory turnover, better it is. so This firm's inventory turnover is better than its peers

(c) To improve turnover, firm can (i) increase sales (ii) focus on highest selling products (iii) optimize puchasing quantity [Thumbs up please]

Answer 2

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