THE CASE OF THE UNIDENTIFIED INDUSTRIES

Inventory segmentation represents a substantial challenge due to the hardy product selection requirements for Internet retailers. Determining the products that must be handle in one 's own distribution centers, versus wholesaler distribution centers and producers places has an impact on cost service structure of Internet retailers (Chiles & Dau, 2005).

Rapid cash collections are indicative of high turnover; however, loss of customers to rival firms and tight credit levels arise from extremely high accounts receivable turnover level, (Horngren, 2013, p. 805).The accounts receivable turnover for Harry Jones in 2014 was 7.93 times. This figure decreased to 5.63 times in 2015. Both figures are less than the industry average of 9 times. Low inventory turnover levels might be attributed to reduced accounts receivable turnover levels throughout both 2014 and 2015. Inventory levels can be increased in the future to achieve higher accounts receivable turnover, (Horngren, 2013, p. 805).

At 200 days Sears’ average receivables collection period was very high when compared to Wal-Mart’s 3 days. Wal-Mart’s inventory turnover of 5.78 edged out Sears’ 5.55, leading to a 3 day difference in the average number of days in inventory. Wal-Mart’s return on asserts of 0.083 was higher than Sears’ 0.032. Due to Sears’ heavy reliance on debt its debt service coverage ratio was 1.1 whereas Wal-Mart’s was 11.7.

In this case, a summary sheet which contains 14 sets of financial data from 14 different industries is provided. The task is to match 14 different firms with 14 industries by distinguishing the differences (e.g. sources of financing, profitability, the inventory turnover and the accounts receivable collection period) in the financial structures.

Staples and Office Depot have substantially similar turnover rates for both 2011 and 2012 but 2013 saw a tremendous disparity between the two. Staples’ rate of turnover stayed relatively constant in all years measured with maximum variation of about six-tenths of a point. This signifies that Staples has a strength in inventory management and is comparatively good at ordering what it can sell and selling what it orders. This is important because unsold inventory can quickly become obsolete and even a liability (Lecture).

Looking at the balance sheet of firm A, we can notice several things right away. We can see that a large chunk (54%) of its assets is in cash and marketable securities. From this fact we can deduce that this firm does a majority of their business with consumers and not other businesses. On the liabilities side, we can see that the company has large percentages of accounts payable and long-term debt (37% and 41% respectively). When we put these pieces of information we can see how a department store can have financial data that is consistent with firm A. The majority of transactions would be cash sales; however the company still has some accounts receivables,

11. Accounts receivable turnover and days sales in accounts receivable for the last three years:

Once inventory is stratified as A, B, C, D, X and Y items, the classification aids in making several business decisions. How does inventory stratification influence

The budgeted collections accounts receivable from May and June are $802,800. The company collects the sales on account, 60% the first month and 38% the next month. In this situation, substantial amount of cash inflow is receivable, compared with the rate of 80% that are Accounts payable in the first month for materials

Cash equivalents are very safe assets that can be readily converted into cash; NIKE is one such example. Accounts receivables consist of the short-term obligations owed to the company by its clients. Companies often sell products or services to customers on credit; these obligations are held in the current assets account until the clients pay them off. Lastly, inventory represents the raw materials, work-in-progress goods and the company’s finished goods. Depending on the company, the exact makeup of the inventory account will differ. For example, a manufacturing firm will carry a large amount of raw materials, while a retail firm caries none. The makeup of a retailer 's inventory typically consists of goods purchased from manufacturers and wholesalers. In my opinion balance sheet is in balance where the value of the assets equals the combined value of the liabilities and shareholders’ equity. The assets and liabilities sections of the balance sheet are organized by how current the account is. So for the asset side, the accounts are classified typically from most liquid to least liquid. For the liabilities side, the accounts are organized from short to long-term borrowings and other obligations. Therefore, can show you with a better idea of the company’s financial condition along with its operational efficiency. This can give investors an idea of how financially stable the company

In selecting and managing merchandise inventory, “each inventory item must be scanned, described, classified and linked to search options” on the company’s website (Article). This requirement leads to a change in the database whenever inventory items are added or removed from the shelf. IT staff must locate and remove obsolete and discontinued items from the current database and then annotate and add them to the backup system to assist in profitability evaluation, forecasting, and making future manufacturing decisions. The feature of providing diverse selections of products to customers in e-tail businesses makes merchandise inventory selection and management more complex than in brick-and-mortar businesses. Moreover, information technology is considered to be the backbone of the virtual storefront in e-tail corporations because almost all activities, especially in pure e-tail businesses, are

Learning Team C was tasked with preparing a project proposal that would analyze and present data on an inventory management problem that Amazon Incorporated (Amazon) could face. The Summer Historical Inventory Data shown below was used in the calculations:

Finally, the average debtors collection period of this company is longer than Sun’s in three years. The company should try to shorten the collection period from the customers to improve the efficiency ratio. The

The Retail industry consists of a systematic system including the products information, inventory system, employee’s information as well as for the billing purposes. To keep track of the sales and to avoid mix up in inventory and to have a aligned billing system to avoid mix of bills amongst the patrons. Other retail stores at the malls or separate factory outlets etc. is using this system to be able to give a good service to its patrons.

Increasing inventory turnover is a cornerstone to improving the sales volume and therefore the net revenue of the retailer. Inventory turnover is especially important for perishable goods such as fruit and vegetables. This is because these types of merchandise quickly turn bad and get damaged after being handled for too long or from being under the