result in significant decreases in A/R and inventories. Reviewing the financial ratios‚ we also noted the relationship between inventories and COGS‚ which is not included in Beneish’s index. The high growth rate of sales should indicate the importance of the inventory turnover. By using average inventories as the denominator of the inventory turnover ratio for a firm with high growth rates will tend to increase the turnover rate. However‚ the inventory turnover ratios for the Company seem unusually
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* Inventory replenishment cycle time * Inventory turns All of these metrics will add value to Apple by giving them insight into current production and order fulfillment issues. 1.INVENTORY TURN In its eighth annual Supply Chain Top 25 (via Business Insider)‚ Gartner analysts once again ranked Apple’s supply chain as the best in the world. Apple stood out with a inventory turnover period of five days‚ calculated by dividing the 365 days in one year with the inventory turnover ratio
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the Acid Ratio is calculated by taking the company’s current assets minus the company’s inventories divided by current liabilities. Showing how the company can pay back its short term obligations that need to paid off quickly‚ giving the company a better rounded number by excluding the company’s inventory for its current assets. Why some may ask‚ this is because company’s find it difficult to turn their inventory into cash thus becoming less of an asset. Example B: Quick Ratio= Wal-Mart’s Current
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successfully a company is utilizing its assets to generate revenues. Inventory Turnover= COGS/ Average inventory 1‚428‚730/ 18‚660= 76.57 Indicate a shortage or inadequate inventory levels‚ which may lead to a loss in business. Average days to sell the inventory= 365 days/ inventory turnover ratio 365/ 76.57= 4.8 Measure of the number of times inventory is sold or used in a time period (a year). A low turnover rate might point to overstocking‚ obsolescence‚ or deficiencies in
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Netflix‚ Inc. Case October 2‚ 2011 1. Netflix‚ Inc. has several competitive advantages in the movie rental business. * The strongest advantage they have would be the comprehensive library of titles that they are able to offer to their customers. They have developed a strong relationship with top studios and distributors to enable them to offer a broad selection. Netflix’s is constantly adding new releases and carrying numerous copies of the popular titles. * High levels of customer
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company Inventory turnover An activity ratio calculated as revenue divided by inventory. Rio Tinto PLC’s inventory turnover deteriorated from 2010 to 2011 and from 2011 to 2012. Receivables turnover An activity ratio equal to revenue divided by receivables. Rio Tinto PLC’s receivables turnover improved from 2010 to 2011 but then slightly deteriorated from 2011 to 2012. Payables turnover An activity ratio calculated as revenue divided by payables. Rio Tinto PLC’s payables turnover declined from
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A. Supply Chain Strategy: I recommend the Keiretsu networks as the correct supply chain strategy for the power tool company. The three main strategies are the Keiretsu network‚ virtual company‚ vertical integration. All of them have their advantages and disadvantages. In a Keiretsu network the manufacture will combine the best features of all three methods‚ it is part collaboration‚ using fewer suppliers and some vertical integration. An example of this style of Keiretsu network would be that
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popular entertainment products. In this paper‚ I will analyze the Topps Company’s annual report. I will discuss the business’s inventory turnover ratio and average days to sell their inventory for 2006 and 2005‚ whether the company’s management of inventory is getting better or worse and to conclude‚ I will discuss the cost flow method that Topps use to account for inventory. Examining the Topps financial report can help the corporation recognize exactly where they stand financially in order for the
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University bookstore textbook travails case Reasons for use of the retail method Retailers use the retail method to record the value of inventory because this method is easy to use and acceptable for financial reporting purpose under GAAP. Under retail method‚ inventory is recorded at a predetermined percentage of the original cost. Thus‚ ending balance of inventory can be easily estimated. Stores can keep track of the total cost‚ purchase cost‚ cost of goods available for sale‚ and sale volume during
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meet obligations outstrips its inflow from operations. Butler s exponential growth has caused them to need external financing‚ because they can t self-fund their working capital needs. The might be able to mitigate some of this through better inventory management control such as squeezing their suppliers on credit terms or for increased volume discounts. Going forward their fixed costs will also help build economies of scale which should diminish their external financing demands in future fiscal
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