value: 6.00 points Dollar General Corporation operates general merchandise store

Question

value: 6.00 points Dollar General Corporation operates general merchandise stores that feature quality merchandise at low prices to meet the needs of middle-, low-, and fixed-income families. All stores are located in the United States, predominantly in small towns in 24 midwestern and southeastern states. In a recent year, the company reported average inventories of $1,457,114,000 and an inventory turnover ratio of 4.6. Average total fixed assets were $1,218,674,000 and the fixed asset turnover ratio was 9.5. Determine the gross profit for Dollar General Gross profit

Explanation / Answer

Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory

4.6=Cost of Goods Sold / $1,457,114,000

So, Cost of Goods Sold = $1,457,114,000 * 4.6

Fixed Asset Turnover Ratio = Sales / Average Fixed Assets

9.5 = Sales/ $1,218,674,000

Sales = $1,218,674,000 * 9.5

Gross Profit = Sales - Cost of goods sold

= $11,577,403,000 - $6,702,724,400

Therefore Gross Profit = $4,874,678,600

=$6,702,724,400

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