Presented below are selected data from the financial statements of Ripple Company for 2016, 2015, and 2014.
A Calculate Ripple's inventory turnover ratio for 2016 and 2015.
B How many days would it take to sell the entire inventory at December 31, 2016? At December 31, 2015? Assume 360 days in a year.
C What problems do you see in the company's inventory management?
Definitions:
Goods Manufactured
Items that have been completed through the manufacturing process and are ready for sale.
Cost
The value of money that has been used up to produce something or deliver a service, and hence is not available for use anymore.
Month
A unit of time, typically a portion of a year, based on the orbit of the moon around Earth, commonly comprising 28 to 31 days.
Raw Materials
The unprocessed natural materials or substances used in the initial stages of manufacturing to produce goods.
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