CP7-3 Calculating and Interpreting the Inventory Turnover Ratio and Days to Sell [LO 7-5)] GameWorld...
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CP7-3 Calculating and Interpreting the Inventory Turnover Ratio and Days to Sell [LO 7-5)] GameWorld Corp. is the world's largest multichannel video game retailer. The company reported the following amounts (in millions) in its annual financial statements at the end of January 2016 2015 $13,490 $12,990 Net Sales Revenue Cost of Goods Sold Beginning Inventory Ending Inventory 8,04e 2,250 2,650 7,640 1,55e 2,250 Required 1. Determine the inventory turnover ratio and average days to sell inventory for 2016 and 2015. TIP: Remember to use costs in both the numerator (CGS) and denominator (average inventory). (Use 365 days in a year. Round your intermediate and final answers to 1 decimal place.) 2016 2015 Inventory Turnover Ratio times per year times per year Days to Sell days days 2. At Ultimate Value, inventory turned over 4.7 times during 2016 (77.7 days to sell). Are the GameWorld Corp. inventory managers more effective or less effective than those at Ultimate Value? More effective Less effective
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