The following data are pulled from a recent Walsh Manufacturing annual report
Assets
Raw material inventory $120,000
Work-in-process inventory $50,000
Finished goods inventory $300,000
Property, plant & equipment $500,000
Other assets $200,000
Total assets $1,170,000
Condensed Income Statement
Revenue $2,000,000
Cost of goods sold $600,000
Other expenses $1,000,000
Net income $400,000
Calculate: (a) Percent invested in inventory, (b) Inventory turnover, and (c) Weeks of supply.
(a) Percent invested in inventory = (120,000 + 50,000 + 300,000 )/1,170,000 = 40.17%
(b) Inventory turnover = 600,000/(120,000 + 50,000 + 300,000 ) = 1.28
(c) Weeks of supply = (120,000 + 50,000 + 300,000 ) /(600,000/52 ) = 40.73
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