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 Cost of goods sold Net income $17,703 13,980 315 $15,427 11,864 786 Compute ConAgra's (a) inventory turnover and (b) the average days to sell inventory for 2014 and 2013. (Round inventory turnover to 1 decimal place, e.g. 7.6 and average days to sell inventory to 0 decimal places, e.g. 65.) 2014 2013 (a) Inventory turnover (b) Average days to sell inventory Click if you would like to Show Work for this question: times times days days Qpen Show Work

Explanation / Answer

Inventory turnover ratio = Cost of goods sold / Average inventory Particulars 2014 2013 Cost of goods sold $13,980 $11,864 Average inventory $2,139 $2,209 Inventory turnover ratio = 6.54 times 5.37 times Average days to sell inventory = 365 days in the year / Inventory turnover ratio Particulars 2014 2013 Number of days in the year 365 365 Inventory turnover 6.54 5.37 Average days to sell inventory = 55.81 days 67.97 days

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