Problem: Baker Mfg. Inc. (see Table below) wishes to compareits inventory turnover to those of industry leaders, who have turnoverof about 13 times per year and 8% of their assets invested ininventory.
Q1. What is Baker’s inventory turnover?
Q2. What is Baker’s percent of assets committed to inventory?
Q3. How does Baker’s performance compare to the industry leaders?
ARROW DISTRIBUTING CORP.
Net revenue $16,500
Cost of sales $13,500
Inventory $ 1,000
Total assets $ 8,600
BAKER MFG. INC.
Net revenue $27,500
Cost of sales $21,500
Inventory $ 1,250
Total assets $16,600