Question

# Suppose this information is available for PepsiCo, Inc. for 2015, 2016, and 2017. (in millions) 2015...

Suppose this information is available for PepsiCo, Inc. for 2015, 2016, and 2017.
 (in millions) 2015 2016 2017 Beginning inventory \$2,100 \$2,200 \$2,800 Ending inventory 2,200 2,800 2,600 Cost of goods sold 17,951 20,435 20,445 Sales revenue 38,895 42,974 43,152
Calculate the inventory turnover for PepsiCo, Inc. for 2015, 2016, and 2017. (Round inventory turnover to 1 decimal place, e.g. 5.1.)
 2015 2016 2017 Inventory turnover times times times
Calculate the days in inventory for PepsiCo, Inc. for 2015, 2016, and 2017. (Round days in inventory to 1 decimal place, e.g. 5.1.)
 2015 2016 2017 Days in inventory days days days
Calculate the gross profit rate for PepsiCo, Inc. for 2015, 2016, and 2017. (Round gross profit rate to 1 decimal place, e.g. 5.1%.)
 2015 2016 2017 Gross profit rate % % %

Inventory turnover ratio = Cost of goods sold / Average inventory

Average inventory = (Beginning inventory + Ending inventory) / 2

2015 = \$17,951 / (\$2,100 + \$2,200) / 2

= \$17,951 / \$2,150

= 8.3 times

2016 = \$20,435 / (\$2,200 + \$2,800) /2

= \$20,435 / \$2,500

= 8.2 times

2017 = \$20,445 / (\$2,800 + \$2,600)

= \$20,445 / \$2,700

= 7.6 times

Days in inventory = 365 / Inventory turnover ratio

2015 = 365 / 8.3

= 44.0 days

2016 = 365 / 8.2

= 44.5 days

2017 = 365 / 7.6

= 48.0 days

Gross Profit rate = (Sales Revenue - cost of goods sold) / Sales revenue

2015 = (\$38,895 - \$17,951) / \$38,895

= \$20,944 / \$38,895

= 53.8%

2016 = (\$42,974 - \$20,435) / \$42,974

= \$22,539 / \$42,974

= 52.4%

2017 = (\$43,152 - \$20,445) / \$43,152

= \$22,707 / \$43,152

= 52.6%

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