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Finance: Effects of increase in inventory turns for Toys by

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See the attached file for the graphs included.

Attached are simplified versions of the balance sheet and income statement. Use this information to answer the question below:

A 15% increase in inventory turns would bring this ration to _____, suggesting _____in_____.

A. 109 days; a deterioration; profitability

B. 4.8 times; an improvement; efficiency

C. 3.9 days; a deterioration; profitability

D.3.9 times; an improvement; efficiency

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The inventory turnover is cogs/average inventory:

8.4 / 2.5 = ...

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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