Ivanhoe Electronics has enjoyed tremendous sales growth during the last years. However, even though sales have steadily increased, the company's CEO, Helen Martin, is concerned about certain aspects of its performance. She has called a meeting with the corporate controller and the vice presidents of finance, operations, sales, and marketing to discuss the company's performance. Helen begins the meeting by making the following observations:
We have been forced to take significant writedowns on inventory during each of the last three years because of obsolescence. In addition, inventory storage costs have soared. We rent four additional warehouses to store our increasingly diverse inventory. Five years ago inventory represented only of the value of our total assets. It now exceeds Yet, even with all of this inventory, "stockouts" measured by complaints by customers that the desired product is not available have increased by during the last three years. And worse yet, it seems that we constantly must discount merchandise that we have too much of
Helen asks the group to review the following data and make suggestions as to how the company's performance might be improved.
tablein millionsInventoryRaw materials,$$$$Work in process,Finished goods,Total inventory,$$$$Current assets,$ $$$Total assets,$$$$Current liabilities,$$$$Sales revenue,$$$$Cost of goods sold,$ $$$Net income,$$$$
Compute the current ratio, gross profit rate, profit margin, inventory turnover, and days in inventory for and Round current ratios to decimal places, eg and all other answers to decimal place, eg Use days for calculation.
tableurrent Ratio,::: SOLVE FOR THE INVENTORY TURNOVER AND DAYS IN INVENTORY FOR and thank you.
