Solution-Determine for both companies the inventory turnover

Determine for both companies the inventory turnover

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Reference no: EM132691645

Problem - Inventory analysis - 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):

	QT	Elppa
Sales	$56,940	$120,357
Cost of goods sold	44,754	92,385
Inventory, beginning of period	1,382	6,317
Inventory, end of period	1,404	7,490

Required -

a. Determine for both companies (1) the inventory turnover and Round to one decimal place.

a. Determine for both companies (2) the number of days' sales in inventory. Round to one decimal place.

b. Interpret the inventory ratios in the context of both companies' operating strategies.

Reference no: EM132691645

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Determine for both companies the inventory turnover

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Reference no: EM132691645

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