) Baker Mfg. Inc. wishes to compare its inventory turnover to those of industry

Question

) Baker Mfg. Inc. wishes to compare its inventory turnover to those of industry leaders, who have turnover of about 13 times per year and 8% of their assets invested in inventory.

A) What is Baker's inventory turnover?

B) What is Baker's percent of assets committed to inventory?

Tabel

Arrow Distributing Corp.
Net Revenue $16,500
Cost of Sales $ 13,500
Inventory $ 1,000
Total Assets $8,600

Baker Mfg. Inc.

Net Revenue $27,500
Cost of Sales $21,500
Inventory $1,250
Total Assets $16,600

Please Show WORK

Explanation / Answer

A) Baker's inventory turnover=Cost of sales/Inventory=21500/1250=17.2 B)Baker's percent of assets committed to inventory=1250/16600 =7.53%

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