Benchmarking Thor Industries’ Inventory Management - Group 2 Teddy Dwork‚ Alexa Esquivel‚ Noelle Fennessy‚ Alec Madow‚ Marc Milgrim 1. Inventory Share of Total Assets Net Accts Rec. Share of Total Assets Gross Profit Percentage (GP/Sales) SG&A Percentage (SG&A/Sales) 2008 15.3% 14.7% 12.2% 6.7% 2007 16.0% 16.7% 12.7% 6.2% 2. 2008 5.8% 13.2% 20.2 25.3 2007 6.9% 17.6% 22.7 24.7 Return on Sales = EBIT/Revenue Return on Equity = NI/Inv Days Receivable = AR/(sales/365) Days Inventory= (Avg Inv/COGS) x 365
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2 A. What was Topps’ inventory turnover ratio and average days to sell inventory for 2006 and 2005? In order for one to completely understand what inventory turnover ratio is‚ it is important to define it. Inventory turnover ratio is the cost of goods sold divided by inventory (Edmonds‚ et al.‚ 2007). In 2006‚ Topps company had a turnover ratio of 5.38‚ compared to 5.74 in 2005. These figures show that Topps had a better year in 2005
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valuable ratio that could have been used by the auditor to detect fraud would have been the inventory turnover ratio. This ratio shows the sales in comparison to the total inventory on hand. They would have been able to see the significant decline in this ratio and been able to suspect that there was an error in inventory. The inventory would have been going up but the sales did not due to the factitious invoices. Another ratio that would be beneficial would be to look at the inventory as a percentage
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companies. The Ratio analysis will be used as a basic tool in financial statement analysis to highlight the significance of financial statement data to get a better understanding of the WDCs sustainable earnings and measure profitability and liquidity. There are three financial ratio classification Liquidity‚ Solvency and Profitability Liquidity. Liquidity ratio measures short-term ability of the company to pay its maturing obligations and to meet unexpected needs for cash. Solvency Ratio measures
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In the past 10 years‚ Wal-Mart has grown tremendously to become the largest retailer in the world. Being America’s largest employer and the most successful company‚ Wal-Mart’s influence is unparalleled. Wal-Mart isn’t just the largest retailer in the world‚ over the past several years it has popped in and out of the top spot on the Fortune 500 list—meaning that the firm has had revenues greater than any firm in the United States. Wal-Mart is so big that in three months it sells more than a whole
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rather than descriptive. An appendix attached to this paper will provide detailed information about the calculations made and the reasoning behind them. Analysis of the situation Physical flow of goods ALP warehouses its finished goods inventory in eight master distribution canters (MDCs) located throughout the United States‚ each servicing sales for its entire region. The whole flow of goods can be represented as a flow chart as the one shown in figure below. It can be taken as an assumption
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variable in determining a share’s price. It is also a major component used to calculate the price-to-earnings valuation ratio. The EPS is somewhat helpful in comparing one company to another‚ assuming they are in the same industry‚ but it doesn’t tell you whether it’s a good stock to buy or what the market thinks of it. For that information‚ we need to look at some ratios. http://stocks.about.com/od/evaluatingstocks/a/eps1.htm Hershey In order to analyze EPS for Hershey it is necessary
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first chart in appendix A‚ which shows that the increase in COGS followed the decrease in employment. ISF’s liquidity ratios show a declining trend could be considered a financial weakness; this trend is detailed in the second chart of appendix A. Another IFS weakness is the decline inventory turnover ratio; shown in appendix B‚ shows a reduction in how fast ISF is converting inventory into accounts receivable (4.65 to 4.61)‚ this shows a small decline. ISF has an opportunity to expand markets in Europe
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year reported sales of $10 million and an inventory turnover ratio of 2. The company is now adopting a new inventory system. If the new system is able to reduce the firm’s inventory level and increase the firm’s inventory turnover ratio to 5 while maintaining the same level of sales‚ how much cash will be freed up? Inventory = Sales / Inventory Turnover Ratio Inventory = $10 million / 2 = $5 Million Inventory = Sales / Inventory Turnover Ratio Inventory = $10 Million / $5 Million = $2 Million
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| Executive Summary Advanced Medical Corporation is experiencing significant growth; however‚ large expenditures in R&D and poor inventory and accounts receivables management process have resulted in negative earnings. By reducing the company’s spending‚ employing lower cost developing techniques‚ and adjusting the inventory and accounts receivables management process‚ AMT will be able to generate enough positive cash flow to pay off its debt and eventually increase its R&D
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