[The following information applies to the questions displayed below.] Wawa Food Markets is a convenience store chain located primarily in the Northeast. The company sells gas, candy bars, drinks, and other grocery- related items. St. Jude Medical Incorporated sells medical devices related to cardiovascular needs. Suppose a local Wawa Food Market and St. Jude sales office report the following amounts in the same year (company names are disguised): Company 1 $400,000 Company 2 $400,000 Net sales Cost of goods sold 180,000 330,000 Gross profit $220,000 $ 70,000 Average inventory $ 40,000 $ 30.000 Required: 1. For Company 1 and Company 2, calculate the inventory turnover ratio.

[The following information applies to the questions displayed below.] Wawa Food Markets is a convenience store chain located primarily in the Northeast. The company sells gas, candy bars, drinks, and other grocery- related items. St. Jude Medical Incorporated sells medical devices related to cardiovascular needs. Suppose a local Wawa Food Market and St. Jude sales office report the following amounts in the same year (company names are disguised): Company 1 $400,000 Company 2 $400,000 Net sales Cost of goods sold 180,000 330,000 Gross profit $220,000 $ 70,000 Average inventory $ 40,000 $ 30.000 Required: 1. For Company 1 and Company 2, calculate the inventory turnover ratio.

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter16: Multistate Corporate Taxation

Section: Chapter Questions

Problem 42P

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Wawa Food Markets is a convenience store chain located primarily in the Northeast. The company sells gas, candy bars, drinks, and other grocery-related items. St. Jude Medical Incorporated sells medical devices related to cardiovascular needs. Suppose a local Wawa Food Market and St. Jude sales office report the following amounts in the same year (company names are disguised): Company 1 Company 2Net sales $400,000 $400,000 Cost of goods sold 180,000 330,000 Gross profit $220,000 $ 70,000 Average inventory $ 40,000 $ 30,000Required: 1. For Company 1 and Company 2, calculate the inventory turnover ratio. 2. For Company 1 and Company 2, calculate the gross profit ratio. 3. After comparing the inventory turnover ratios and gross profit ratios, which company do you think is Wawa and which is St. Jude? Explain.
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