Dollar General Corporation operates approximately 9,400 general merchandise stor

Question

Dollar General Corporation operates approximately 9,400 general merchandise stores that feature quality merchandise at low prices to meet the needs of middle-, low-, and fixed- income families in southern, eastern, and midwestern states. For the year ended January 28, 2011, the company reported average inventories of $1,641 (in millions) and an inventory turnover of 5.37. Average total fixed assets were $1,429 (million), and the fixed asset turnover ratio was 9.11.

Calculate Dollar General

Dollar General Corporation operates approximately 9,400 general merchandise stores that feature quality merchandise at low prices to meet the needs of middle-, low-, and fixed- income families in southern, eastern, and midwestern states. For the year ended January 28, 2011, the company reported average inventories of $1,641 (in millions) and an inventory turnover of 5.37. Average total fixed assets were $1,429 (million), and the fixed asset turnover ratio was 9.11.

Explanation / Answer

Hi,

Please find the answer as follows:

Requirement 1:

Fixed asset turnover = Net sales/Average fixed assets

9.11 = Net sales/1429000000

9.11*1429000000 = Net sales

13018190000 = Net sales

Inventory turnover = Cost of goods sold/Average inventory

5.37 = Cost of goods sold/1641000000

5.37*1641000000 = Cost of goods sold

8812170000 = Cost of goods sold

Gross Profit % = Gross Profit/Sales *100 = (13018190000 - 8812170000)/13018190000*100 = 32.3%

Requirement 2:

Gross profit percentage Decreased from the 33.0 percent earned during the previous year.

Thanks.

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