4-2 Why would the inventory turnover ratio be more important for someone analyzing a grocery store chain than an insurance company? The inventory turnover ratio is important to a grocery store because of the much larger inventory required and because some of that inventory is perishable. An insurance company would have no inventory to speak of since its line of business is selling insurance policies or other similar financial products--contracts written on paper and entered into between the company
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My first part is showing how our strategic investments boost our activity First‚ our gross profit on net sales ratio for 2010 is equal to about 20% like its main competitor‚ Staples‚ except that Amazon sales are three times superior to Staples sales. In fact‚ for 5 years‚ our average growth in sales has been 34% against 25% for the industry. This higher progression is due to investments in all aspects of the customer experience‚ including: lowering prices‚ improving availability‚ offering faster
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A high inventory turnover ratio is sometimes not a good thing for it reveals that the company may not have enough inventories to sell. People can analyze inventory turnover ratio with days in the inventory ratio. Nordstrom’s inventory turnover ratio in 2014 is 5.15 times which means the company turns over its inventory into sales 5 times a year‚ and the ratio in 2013 is 5.35 times. By comparing the inventory turnover ratio from 2013 with the ratio form 2014‚ we can conclude
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MODERN CEMENT Ratio Analysis Activity Analysis |ST Activity Ratios |2002 |2003 |2004 |2005 |2006 | |Inventory Turnover Ratio |0 |1.11 |0.097 |0.085 |0.696 | |Average No. Days Inventory In Stock |0 |328.9 |3742.72 |4301.69 |524.56 | Interpretations: Short Term Activity ratios calculate the operational efficiency regarding the utilization
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Evaluation of Inventory Turnover Ratios Abstract Effective inventory management is a top priority for companies looking to free up cash and leverage working capital. Inventory turnover varies widely across different industries and different companies. We will discuss how inventory management does affect company’s performance and which factors could affect the inventory turnover ratios. We analyzed five industries: pharmacy‚ automobile manufacture‚ grocery store‚ clothing‚ and restaurant
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Inventory turnover Viviana Palacios MGT521 Professor Edward Dempsey July 26‚ 2010 The investment of a company’s success depends on their inventory. Inventory turnover is a ratio showing how many times a company’s inventory is sold and replaced over the period of time. The risk of Kudler Fine Foods was to make sure that their perished goods had a fast inventory turnover rate. The importance of high inventory turnover was expected to protect the brand’s integrity and vision of keeping all goods
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Receivables Turnover Ratio interpretation Receivables Turnover Ratio is one of the efficiency ratios and measures the number of times receivables are collected‚ on average‚ during the fiscal year. Receivables Turnover Ratio formula is: Receivables Turnover Ratio formula Receivables turnover ratio measures company’s efficiency in collecting its sales on credit and collection policies. This ratio takes in consideration ONLY the credit sales. If the cash sales are included‚ the ratio will be affected
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in 2010 and $1‚200‚000 in 2011. a. Calculate the inventory turnover for each year. Comment on your findings b. What would have been the amount of inventories in 2011 if the 2010 turnover ratio had been maintained? a. inventory turnover for 2010 =COGS/Inventory = $1‚000‚000/350‚000=2.857 inventory turnover for 2011 =COGS/Inventory = $1‚200‚000/500‚000=2.4 b. $1‚200‚000 /inventory =2.857 Inventory in 2011 to maintain 2010 turnover ratio = $420‚021.00 2. The Robinson Company has the
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4.5 TURNOVER RATIO Turnover ratio help in knowing how well the company manages it resources. If the company manages its resources well‚ the larger will be its sales and thus helps in making larger profits. Thus it depends on the company how well it converts the assets to sales which can be determined through this ratio. I. DEBTORS RATIO It represents the number of days required or taken to collect the credit sales which reflects the collection strategy of the company. It measure the
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Ejvind Vøgg – Own Man in India The Indian Oil and Gas Industry DIBD – OMII Own Man In India April 2012 Ejvind Vøgg – Own Man in India Introduction to the Indian Oil and Gas Industry • Current market situation • Growth of Indian Oil and Gas industry • Competitive Landscape • Nordic and Danish player • SWOT Ejvind Vøgg – Own Man in India Current market situation - OIL • The Indian Oil and Gas industry plays an important role in the Indian economy with major refineries and gas
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