Question

Haymitch Global Industries is a world leading producer of loudspeakers and other electronics products, which are sold under brand names like JRH, Excelsior, and Haymitch/Krug. The company reported the following amounts in its financial statements (in millions)

1.Determine the inventory turnover ratio and average days to sell inventory for 2016 and 2015. (Use 365 days in a year. Round your intermediate and final answers to 1 decimal place.)

Haymitch Global Industries is a world leading producer of loudspeakers and other electronics products, which are sold under brand names like JRH, Excelsior, and Haymitch/Krug. The company reported the following amounts in its financial statements (in millions): Net Sales Cost of Goods Sold Beginning Inventory Ending Inventory 2016 $5,500 4,400 530 630 2015 $5,569 4,309 469 530 Required: 1. Determine the inventory turnover ratio and average days to sell inventory for 2016 and 2015. (Use 365 days in a year. Round your intermediate and final answers to 1 decimal place.) 2016 2015 Inventory Turnover Ratio Days to Sell times per year days times per year days

Answer 1

	2016	2015
Inventory Turnover ratio	= 4400/[(530+630)/2] = 7.6	= 4300/[(460+530)/2] = 8.7
Days to sell	= 365/7.6 = 48	= 365/8.7 = 42

Inventory Turnover = Cost of Goods Sold /Average inventory

Days to sell = 365/Inventory Turnover