Question

Inventory Analysis Admiral Company and Corporal, Inc., compete against each other in general merchandise retailing, gas stations, pharmacies, and optical centers. Below is selected financial information for both companies from a recent year's financial statements (in millions) Sales Cost of goods sold Inventory, beginning of perioc Inventory, end of period Admiral Company $26,280 21,900 678 678 Corporal, Inc. 斜4,3500 32,850 2,716 3,116 a. Determine for both companies (1) the inventory turnover and (2) the number of days' sales in inventory. Round to one decimal place. Admiral Corporal 11.3 1. Inventory turnover 2. Number of days' sales in inventory b. All of the following are true of Admiral's strategy except This strategy results in greater obsolescence risk than that used by Corporal. V 32.3 days days

Answer 1

a) Calculate following :

		Admiral	Corporal
1.	Inventory turnover	32.3	11.3
2.	Number of day's sales in inventory (365/Inventory turnover)	11.3 days	32.3 days

b) All of the following are true of admiral's strategy except :

This strategy results in greater obsolescence risk than that used by corporal.