Question

Exercise 9-23 The financial statements of ConAgra Foods, Inc.’s 2014 annual report disclose the following information....

Exercise 9-23

The financial statements of ConAgra Foods, Inc.’s 2014 annual report disclose the following information.
(in millions)
2014
2013
2012
Year-end inventories $2,201 $2,077 $2,341
Fiscal Year
2014
2013
Net sales $17,703 $15,427
Cost of goods sold 13,980 11,864
Net income 315 786

Compute ConAgra’s (a) inventory turnover and (b) the average days to sell inventory for 2014 and 2013.

Homework Answers

Answer #1
Inventory Turnover Ratio= Cost of Goods Sold/Average Inventory ** Working Note:
2014 2013 2012
2014 2013 Inventories 2201 2077 2341
Cost of Goods Sold 13980 11864
Average Inventory** 2139 2209 2014 2013
Net Sales 17703 15427
Inventory Turnover Ratio= 6.54 5.37 COGS 13980 11864
Net Income 315 786
Average Days to Sell Inventory: 2014 2013
365/Inventory Turnover Ratio Average Inventory 2139 2209
(2201+2077)/2 (2077+2341)/2
Average Days to Sell Inventory: 2014 2013
Days in Year 365 365
Inventory Turnover Ratio 6.54 5.37
Average Days to Sell Inventory 55.85 67.96
Average Days to Sell Inventory 56 days 68 days
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