QT, Inc., and Elppa Computers, Inc., compete with each other in the personal computer market. QT assembles computers to customer orders, building and delivering a computer within four days of a customer entering an order online. Elppa, on the other hand, builds computers for inventory prior to receiving an order. These computers are sold from inventory once an order is received. Selected financial information for both companies from recent financial statements follows (in millions): QTElppaSales$56,940 $120,357 Cost of merchandise sold44,754 92,385 Inventory, beginning of period1,382 6,317 Inventory, end of period1,404 7,490 a. Determine for both companies (1) the inventory turnover and (2) the number of days' sales in inventory. Round your calculations and answers to one decimal place. Assume 365 days a year. QTElppa1. Inventory turnoverfill in the blank 1 fill in the blank 2 2. Number of days' sales in inventoryfill in the blank 3daysfill in the blank 4daysb. QT has a much inventory turnover ratio than does Elppa. Likewise, QT has a much number of days' sales in inventory.

Average inventory = Beginning inventory + Ending inventory 2 QT =…

Answered: QT, Inc., and Elppa Computers, Inc.,…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 12E

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QT, Inc., and Elppa Computers, Inc., compete with each other in the personal computer market. QT assembles computers to customer orders, building and delivering a computer within four days of a customer entering an order online. Elppa, on the other hand, builds computers for inventory prior to receiving an order. These computers are sold from inventory once an order is received. Selected financial information for both companies from recent financial statements follows (in millions):

	QT	Elppa
Sales	$56,940		$120,357
Cost of merchandise sold	44,754		92,385
Inventory, beginning of period	1,382		6,317
Inventory, end of period	1,404		7,490

a. Determine for both companies (1) the inventory turnover and (2) the number of days' sales in inventory. Round your calculations and answers to one decimal place. Assume 365 days a year.

	QT	Elppa
1. Inventory turnover	fill in the blank 1		fill in the blank 2
2. Number of days' sales in inventory	fill in the blank 3	days	fill in the blank 4	days

b. QT has a much

inventory turnover ratio than does Elppa. Likewise, QT has a much

number of days' sales in inventory.

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