Calculate the gross profit ratio and inventory turnover ratio. (LO 6)
The following information is from the financial statements of Toys for Toddlers Company
|
For year ended |
December 31, |
December 31, |
December 31, |
|
(amount sin thousands) |
2007 |
2006 |
2005 |
|
Sales |
$2,534,135 |
52,187,438 |
$ 1,925,319 |
|
Cost of goods sold |
1,634,562 |
1,383,655 |
1,229,277 |
|
Inventory |
54,353 |
47,433 |
45,334 |
Required
a. Calculate the gross profit ratio for the last 2 years shown.
b. Calculate the inventory turnover ratio for the last 2 years shown.
c. What information do these comparisons provide?