Exercise 9-23 The financial statements of ConAgra Foods, Inc. ’s 2014 annual rep

Question

Exercise 9-23

The financial statements of ConAgra Foods, Inc.’s 2014 annual report disclose the following information.
(in millions) 2014 2013 2012 Year-end inventories $2,201 $2,077 $2,341 Fiscal Year 2014 2013 Net sales $17,703 $15,427 Cost of goods sold 13,980 11,864 Net income 315 786
Compute ConAgra’s (a) inventory turnover and (b) the average days to sell inventory for 2014 and 2013. The financial statements of ConAgra Foods, Inc.’s 2014 annual report disclose the following information.
(in millions) 2014 2013 2012 Year-end inventories $2,201 $2,077 $2,341 Fiscal Year 2014 2013 Net sales $17,703 $15,427 Cost of goods sold 13,980 11,864 Net income 315 786
Compute ConAgra’s (a) inventory turnover and (b) the average days to sell inventory for 2014 and 2013. The financial statements of ConAgra Foods, Inc.’s 2014 annual report disclose the following information.
(in millions) 2014 2013 2012 Year-end inventories $2,201 $2,077 $2,341 Fiscal Year 2014 2013 Net sales $17,703 $15,427 Cost of goods sold 13,980 11,864 Net income 315 786
Compute ConAgra’s (a) inventory turnover and (b) the average days to sell inventory for 2014 and 2013. 2014 2013 2012 Fiscal Year 2014 2013

Exercise 9-23

The financial statements of ConAgra Foods, Inc.’s 2014 annual report disclose the following information.
(in millions) 2014 2013 2012 Year-end inventories $2,201 $2,077 $2,341 Fiscal Year 2014 2013 Net sales $17,703 $15,427 Cost of goods sold 13,980 11,864 Net income 315 786
Compute ConAgra’s (a) inventory turnover and (b) the average days to sell inventory for 2014 and 2013.

Explanation / Answer

Inventory Turnover Ratio= Cost of Goods Sold/Average Inventory ** Working Note: 2014 2013 2012 2014 2013 Inventories 2201 2077 2341 Cost of Goods Sold 13980 11864 Average Inventory** 2139 2209 2014 2013 Net Sales 17703 15427 Inventory Turnover Ratio= 6.54 5.37 COGS 13980 11864 Net Income 315 786 Average Days to Sell Inventory: 2014 2013 365/Inventory Turnover Ratio Average Inventory 2139 2209 (2201+2077)/2 (2077+2341)/2 Average Days to Sell Inventory: 2014 2013 Days in Year 365 365 Inventory Turnover Ratio 6.54 5.37 Average Days to Sell Inventory 55.85 67.96 Average Days to Sell Inventory 56 days 68 days

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