Respuesta :
Answer:
Alpha Company:
- inventory turnover ratio = 3.62
- days in inventory = 101 days
Omega Company
- inventory turnover ratio = 4.13
- days in inventory = 89 days
Explanation:
Alpha Company Omega Company
Beginning inventory $49,500 $71,000
Cost of goods purchased $200,000 $299,000
Cost of goods available
for sale $249,500 $370,000
Ending inventory $57,000 $73,000
Cost of goods sold $192,500 $297,000
inventory turnover rate = cost of goods sold / the average inventory
average inventory = (beginning inventory + ending inventory) / 2
days in inventory = 365 days / inventory turnover ratio
Alpha Company Omega Company
average inventory $53,250 $72,000
inventory turnover $192,500 / $53,250 $297,000 / $72,000
= 3.62 = 4.13
days in inventory 365 / 3.62 365 / 4.13
= 100.83 ≈ 101 days = 88.38 ≈ 89 days
Omega's inventory turnover is 3.62 and Omega's days of inventory on hand is 101 days.
Alpha's inventory turnover is 4.125 and Alpha's days of inventory on hand is 88.48.
What is the inventory turnover and the days of inventory?
Inventory turnover and days of inventory on hand are examples of activity ratio. It measures the efficiency of performing daily task of a firm.
Inventory turnover = cost of goods sold / average inventory
Average inventory = (beginning inventory + ending inventory) / 2
Days of inventory on hand = number of days in period / inventory turnover
Omega's inventory turnover = $192,500 / [(49,500 + 57,000)/2] = 3.62
Omega's days of inventory on hand = 365 / 3.62 = 101 days
Alpha's inventory turnover = $297,000 / [(71,000 + 73,000) / 2] = 4.125
Alpha's days of inventory on hand = 365 / 4.125 = 88.48
To learn more about financial ratios, please check: https://brainly.com/question/26092288
