The financial statements of ConAgra Foods, Inc. ’s 2012 annual report disclose t
ID: 2499190 • Letter: T
Question
The financial statements of ConAgra Foods, Inc.’s 2012 annual report disclose the following information.
May 27, 2012
May 29, 2011
May 30, 2010
Fiscal Year
2012
2011
Compute ConAgra’s (a) inventory turnover and (b) the average days to sell inventory for 2012 and 2011. (Round times to 1 decimal place, e.g. 7.6 and all other answers to 0 decimal places, e.g. 65.)
2012
2011
(in millions)May 27, 2012
May 29, 2011
May 30, 2010
Inventories $1,870 $1,803 $1,598Fiscal Year
2012
2011
Net sales $13,263 $12,303 Cost of goods sold 10,436 9,390 Net income 474 818Explanation / Answer
Answer:
2012
Inventory Turnover : COGS / Average inventory
={ 10436 / (1870+1803)/2 }
= 5.68 or 5.6 Times
Avergage day to sell Inventory = 360/5.6 =64.28 or 64 Days
2011
Inventory Turnover = 9390 /(1803+1598)/2 = 5.52 or 5.5 times
Average day to sell = 360 /5.5 =65.45 or 65 days
Thanks
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