Business Applications Case Performing ratio analysis using real-world data
Ruby Tuesday’s, Inc., operated 680 casual dining restaurants across the United States as of June 3, 2008. Zale Corporation claims to be a leading supplier retailer of fine jewelry. The following data were taken from these companies’ 2008 annual reports. All dollar amounts are in thousands.
| Ruby Tuesday’s | Zale Corporation |
| Jane 3, 2008 | July 31, 2008 |
Sales | $1,346,721* | $2,138,041 |
Cost of goods sold | 370,693 | 1,089,553 |
Net income | 26,377 | 10,801 |
Merchandise inventory | 12,511 | 779,565 |
Required
a. Before performing any calculations, speculate as to which company will take the longest to sell its inventory. Explain the rationale for your decision.
b. Calculate the inventory turnover ratios for Ruby Tuesday’s and Zale Corporation.
c. Calculate the average days to sell inventory for Ruby Tuesday’s and Zale Corporation,
d. Do the calculations from Requirements b and c confirm your speculations in Requirement a?
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