GameWorld Corp. is the world\'s largest multichannel video game retailer. The co
ID: 341172 • Letter: G
Question
GameWorld Corp. is the world's largest multichannel video game retailer. The company reported the I statements (in millions) 2013 2012 Net Sales Revenue $10,900 $10,400 7,040 6,640 2,000 1,300 2,400 2,000 Cost of Goods Sold Beginning Inventory Ending Inventory Required 1. Determine the inventory turnover ratio and average days to sell inventory for 2013 and 2012. (Use 365 days in a year. Round your intermediate and final answers to 1 decimal place.) TIP: Remember to use costs in both the numerator (CGS) and denominator (average inventory). 2013 2012 Inventory Turnover Ratio times per year times per year Days to Sell days days 2. Is GameWorld performing better than its competitor Ultimate Value where inventory turned over 3.5 times during 2013 (65 days to sell) Yes 0Explanation / Answer
[2000+2400]/2
2200
[1300+2000]/2
1650
7040/2200
3.2 times
6640/1650
4 times
365/3.2
114.1 days
365/4
91.3days
2)No ,Gameworld is underperforming than its competitors as its inventory turnover ratio is lower and days to sell is higher.
Formula 2013 2012 Average inventory [Beginninginventory +ending inventory]/2[2000+2400]/2
2200
[1300+2000]/2
1650
Inventory turnover cost of goods sold /Average inventory7040/2200
3.2 times
6640/1650
4 times
days to sell 365 /inventory turnover365/3.2
114.1 days
365/4
91.3days
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