EX 7-16 Inventory turnover
The following data were taken from recent annual reports of Apple Computer, Inc., a manufacturer of personal computers and related products, and American Greetings Corporation, a manufacturer and distributor of greeting cards and related products:
|
Apple |
American Greetings |
|
|
Cost of goods sold |
$23,397,000,000 |
$809,956,000 |
|
Inventory, end of year |
455,000,000 |
203,873,000 |
|
Inventory, beginning of the year |
509,000,000 |
216,671,000 |
a. Determine the inventory turnover for Apple and American Greetings. Round to one decimal place.
b. Would you expect American Greetings’ inventory turnover to be higher or lower than Apple’s? Why?