Use the Following Information Regarding Black Company and Red Company

question 117

Multiple Choice

Use the following information regarding Black Company and Red Company to answer the question "Which amount is equal to Red Company's "days in inventory" for 2016 (to the closest decimal place) ?" $$\begin{array}{l}\begin{array} { | l | c | c | c | } \hline & \text { Year } & \begin{array} { c } \text { Inventory } \\\text { Turnover }\end{array} & \text { Ending Inventory } \\\hline \text { Black Company } & 2015 & & \$ 26,340 \\\hline & 2016 & 8.7 & \$ 29,890 \\\hline & 2017 & 8.4 & \$ 30,100 \\\hline\\\hline \text { Red Company } & 2015 & & \$ 25,860 \\\hline & 2016 & 7.0 & \$ 24,750 \\\hline & 2017 & 7.5 & \$ 22,530 \\\hline\end{array}\end{array}$$

• A)43.5 days
• B)48.7 days
• C)42.0 days
• D)52.1 days

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Definitions:

Controlling

The process of monitoring and evaluating performance to ensure that organizational goals are being met and making adjustments as necessary.

Surpasses Objectives

Exceeding set goals or targets within a given timeframe or project scope.

Feedforward Control

A management technique that focuses on the regulation of future actions based on current performance trends and forecasts to prevent problems before they arise.

Liquidity Ratios

Financial metrics that measure a company's ability to meet its short-term obligations using its most liquid assets.