Purchase Solution

Inventory Investment Calculations

Not what you're looking for?

Ask Custom Question

Calculate the average investment in inventory for each of the following situations. Assume a 365-day year.
a. The firm's annual sales were $18 million, its gross profit margin was 32%, and its average age of inventory is 45 days.
b. The firm's annual sales were $325 million, its cost of goods sold are 80% of sales, and it turns its inventory 10 times per year.
c. The firm's annual cost of goods sold total $120 million, and it turns its inventory about every 70 days.

Purchase this Solution

Solution Summary

The expert examines inventory investment calculations.

Solution Preview

Average investment in inventory = COGS/inventory turnover
Inventory turnover = sales/inventory
Sales = $18,000,000
Gross profit margin = ...

Purchase this Solution


Free BrainMass Quizzes
Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

Learning Lean

This quiz will help you understand the basic concepts of Lean.

IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)