The following information is available for Splish Brothers Inc.
for three recent fiscal years.
2022 |
2021 |
2020 |
||||
---|---|---|---|---|---|---|
Inventory |
$580,000 | $590,000 | $320,000 | |||
Net sales |
1,950,000 | 1,750,000 | 1,350,000 | |||
Cost of goods sold |
1,462,500 | 1,228,500 | 938,000 |
(a)
Calculate the inventory turnover, days in inventory, and gross
profit rate for 2022 and 2021. (Round inventory
turnover to 1 decimal place, e.g. 5.2, days in inventory to 0
decimal places, e.g. 125 and gross profit rate to 1 decimal place,
e.g. 5.2%.)
2022 | 2021 | |||||
---|---|---|---|---|---|---|
Inventory Turnover |
times | times | ||||
Days in Inventory |
days | days | ||||
Gross Profit Rate |
% | % |
a | ||
2022 | 2021 | |
Inventory Turnover | 2.5 times | 2.7 times |
Days in Inventory | 146 days | 135 days |
Gross Profit Rate | 25.0% | 29.8% |
Workings: | ||
2022 | 2021 | |
Cost of goods sold | 1462500 | 1228500 |
Divide by Average inventory | 585000 | 455000 |
Inventory Turnover | 2.5 | 2.7 |
2022 | 2021 | |
Days in a year | 365 | 365 |
Divide by Inventory Turnover | 2.5 | 2.7 |
Days in Inventory | 146 | 135 |
2022 | 2021 | |
Net sales | 1950000 | 1750000 |
Less: Cost of goods sold | 1462500 | 1228500 |
Gross Profit | 487500 | 521500 |
Gross Profit rate | 25.0% | 29.8% |
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