Explain inventory turnover? Can this be too high ever

Q: What is the main difference between a perpetual inventory system and a periodic inventory system?…

A: Inventory can be valued under two methods. 1. perpetual inventory method 2. Periodic inventory…

Q: Contrast the effects that LIFO vs. FIFO would have on ending inventory, net income and cash flow in…

A: Under LIFO(Last in first out) method: Inventory is valued at using the costs incurred for the…

Q: In an inflationary economy, the use of FIFO maximizes the cost of goods sold and minimizes the cost…

A: In an inflationary economy, the prices of goods keep on rising until the economy slows down. Thus,…

Q: Identify the correct statement from the following if, cost of inventory is greater than its net…

A: Net realizable value seems to be an essential indicator being used in accounting reporting for…

Q: Which one of the following sets of inventory cost flow assumptions is not susceptible to profit…

A: FIFO and average cost methods are considered as the sets of inventory cost flow assumptions that are…

Q: When would using the FIFO inventory costing method produce higher inventory account balancesthan the…

A: Inventory is one of the important asset for the business. Valuation and management of inventory is…

Q: Why is inventory management important to companies that have inventory?

A: Inventory: It refers to the items held by an organization which were in various forms like raw…

Q: a) Compare the periodic versus the perpetual system as a control device. b) What sort of…

A: The periodic and perpetual inventory Systems are two systems used to track the quantity of goods…

Q: Which of the following is an advantage of the periodic inventory system?A. frequent physical…

A: When a physical inventory count is performed, a periodic inventory system just updates the ending…

Q: Why does Target feel that the retail inventory method will result in inventory beingvalued at the…

A: LCM (Lower of Cost or Market) approach:   It is an approach that values the inventory at historical…

Q: In calculating inventory turnover, why is cost of goods sold used as the numerator? As the inventory…

A: Inventory turnover ratio:Inventory turnover ratio is used to determine the number of times inventory…

Q: How does Just-In-Time (JIT) system help minimize the inventory investment? Explain.

A: Just-In-Time (JIT) is used for that inventory which is owned by business at reduced amount on…

Q: What would Mako's ROA have been if the inventory turnover had

A: Introduction: The term return on assets can be defined as the returns which a company can generate…

Q: An advantage of the weighted average inventory method is that it smooths out erratic changes in…

A: Inventory accounting is the branch of accounting concerned with the valuation and accounting for…

Q: How can we track purchases and sales when we don't know how much inventory we have until the end of…

A: Sales=Units Sold×Selling Price Purchases=Cost of Goods available for sale-Begining Value of…

Q: How much should be reported as loss from inventory write-down?

A: New Unit Cost to Sale = Unit Selling price updated - Unit Cost The difference in Profit per Unit =…

Q: By having different inventory methods that result in different costs of goods sold and gross profit,…

A: Inventory refers to the stock of work-in-process, raw material & finished goods in the company.…

Q: What is inventory shrinkage? What are some of the reasons for inventory shrinkage?

A: Inventory Shrinkage :  As the name suggests, it is considered as shrinking or shortening of…

Q: During a period of rising inventory costs and stable output prices, describe how net income and…

A: First in first out Method (FIFO) First in first out method is one of the popular method which was…

Q: Identify which of the statements below are true (T) or false (F). Lean businesses aim to: Reduce…

A: Lean businesses aim to: Reduce inventory levels--true

Q: “Managers should always buy inventory in quantities that result in the lowest purchase cost per…

A: Inventory:  Inventory refers to the raw materials, work-in process, and the finished goods products…

Q: Which of the following is an advantage of the periodic inventory system? frequent physical inventory…

A: Periodic inventory system is a system in which cost of goods sold is determined at year end. Value…

Q: Can an inventory turnover be too high?

A: The inventory turnover ratio is nothing but the number of times an entity is replacing the goods. It…

Q: What does a very high inventory turnover ratio signify? Please provide your own example to explain…

A: Inventory turnover ratio is one of the efficiency ratio, which says and calculates how many times…

Q: Explain the purpose of the inventory turnover ratio? Is it possible for a firm to have a high…

A: In finance we make use of various financial ratios to determine the financial health of a company.…

Q: Which inventory method will result in lower net income in a period of rising prices? Which inventory…

A: First-in-First-Out (FIFO): In this method, items purchased initially are sold first. So, the value…

Q: During times of inflation why does the value of inventory change between FIFO and LIFOevaluations?

A: A company uses various methods for valuing the ending inventory. The different methods can be…

Q: How can accounting keep up with the rising sales return rates, especially when it comes to inventory…

A: Management of inventories: Inventory management may be characterized as a system for measuring and…

Q: Why would a "Just in Time" inventory management practice be preferred over a "Just in Case inventory…

A: Just in Time Inventory Management:- It is the inventory technique where labor, material, and other…

Q: Why is reduce inventory cost is an advantage of inventory outsourcing?

A: Inventory is defined as the goods as well as materials, which has the business holding for an…

Q: What factors contribute to (or cause) inventory shrinkage?

A: Shrinkage: The cost of the difference between the recorded inventory value and physical count of…

Q: Are you correct that, by using LIFO, Kroger reports lower inventory and lowerprofits? Why would…

A: Perpetual and periodic inventory system: In merchandise business, there are two types of inventory…

Q: Which of the following is used to analyze the efficiency and effectiveness of inventory management?…

A: Formulas:  Inventory turnover ratio = Cost of goods sold / Average inventory Days' sales in…

Q: ntory decline in value?

A: All of the commodities, goods, merchandise, and materials retained by a firm for the purpose of…

Q: What is an aging schedule? What can be learned from it? How is itaffected by sales fluctuations?

A: Aging schedule is a statement which shows the time taken to recover their receivable and for…

Q: a. Why is a high inventory turnover considered to be a positive indicator?b. Is it possible to have…

A: a.Inventory turnover shows the company’s ability to sell its inventory, it is shown in terms of…

Q: If the book inventory is larger than the physical inventory, the difference is known as Reduction…

A: A reduction occurs when a thing is made smaller or less in size or amount. An overage occurs when…

Q: When inventory costs rise and inventory quantities are not decreasing, what does the LIFO produces?

A: Last-in-First-Out (LIFO): In this method, items purchased recently are sold first. So, the value of…

Q: Which one of the following is a reason for the just- in-time inventory policy? Select one: A. The…

A: Just in time inventory policy means purchasing the inventory when ever required and not maintaining…

Q: Is it possible to have a high inventory turnover and a high number of days’ sales in inventory? Why?

A: Inventory Turnover is calculated to measure the level of inventory hold by the firm compared to…