Transcribed Image Text
Inventory Turnover and days’ sales in inventoryKracker Corp., Foodstuff, Inc., and Winston Stores, Inc. arethree grocery chains in the United States. Inventory management isan important aspect of the grocery retail business. Recent balancesheets for these three companies indicated the followingmerchandise inventory (in millions) information:KrackerCorp.FoodstuffInc.WinstonStoresCost of merchandise sold$32,850.0$33,215.0$35,040.0Inventory, beginning of year1,908.92,042.01,483.2Inventory, end of year1,871.11,962.01,396.8a. & b. Determine the inventory turnoverand the number of days’ sales in inventory (use 365 days and roundto the nearest day) for the three companies. Round allinterim calculations to one decimal place. For days' sales ininventory, round final answers to the nearest day, and forinventory turnover, round to one decimal place.Company namesInventory TurnoverDays' Sales in InventoryKrackerfill in the blank 1fill in the blank 2 daysFoodstufffill in the blank 3fill in the blank 4 daysWinston Storesfill in the blank 5fill in the blank 6 daysc. The inventory turnover ratios and days’sales in inventory are for Kracker and Foodstuff.Winston Stores has a inventory turnover anda days’ sales in inventory than Kracker andFoodstuff. These results suggest that Kracker and Foodstuffare efficient than Winston Stores in managinginventory.d. If Kracker had Winston Stores’ days’ salesin inventory, how much additional cash flow would have beengenerated from the smaller inventory relative to its actual averageinventory position? Round interim calculations to onedecimal place and your final answer to the nearestmillion.$fill in the blank 11 million