Reference no: EM132323863

Question

QT, Inc. and Elppa Computers, Inc. compete with each other in the personal computer market. QT assembles computers to customer orders, building and delivering a computer within four days of a customer entering an order online. Elppa, on the other hand, builds computers for inventory prior to receiving an order. These computers are sold from inventory once an order is received. Selected financial information for both companies from recent financial statements follows (in millions):

QTElppaSales$35,040 $46,400

Cost of goods sold29,200 43,800

Inventory, beginning of period1,084 4,676

Inventory, end of period1,284 5,476

a. Determine for both companies (1) the inventory turnover and (2) the number of days' sales in inventory. Round your calculations and answers to one decimal place. Assume 365 days a year.

QTElppa 1. Inventory turnover 2. Number of days' sales in inventorydaysdays

b. QT has a inventory turnover ratio than does Elppa Company. Likewise, QT has a number of days' sales in inventory.