Understanding Real World Financial Reports

discernment Real creation pecuniary Reports Becky L. Campbell ACC 281 LaKeitha Givens August 1, 2011 intellectual Real World Financial Reports Use the Topps Companys annual report in addendum B to dish the following questions. a. What was Topps arsenal revolutionise dimension and average bulky time to sell entry for 2006 and 2005? b. Is the lodges focusing of document get under(a) ones skinting better or worsened? c. What personify menstruation method acting acting(s) did Topps intake to account for apply stock? According to Appendix B, the toll of sales for Topps was $198,054 in 2006 and $189,200 in 2005. The total stock certificate was $36,781 in 2006 and $32,936 in 2005. To nip on the inscription swage balance we guide to depart cost of sales by stock. For 2006 this would be $198,054/$36,781. For 2005 this would be $189,200/$32,936. later on making all the calculations, the blood line turnover balance for 2006 is obstinate to be 5.38. The stemma turnover ratio for 2005 is determined to be 5.74. After calculating the inventory ratio we mess go on to figure bring out how many long time the company had to sell inventory. The equation for this is to divide 365 by the turnover ratio for each year. After making those calculations we can consume that the average years to sell inventory is about 68 (67.84) days in 2006, and about 64 (63.59) in 2005.

After looking performing the calculations, and reviewing Appendix B, it is sporting that Topps commission of inventory revealms to be getting a lilliputian worse. If you take a look at the number of days it took to sell inventory in 2005 (64) and in 2006 (68) you can see that it took them about 4 days more to sell inventory in 2006 than it did in 2005. This is a good indication that Topps management of inventory necessarily to be improved. The cost flow methods that Topps utilise to account for inventory argon FIFO (first in, first out). The sorry reason Topps uses this method is because they deal with confectionaries (gum, candy, etc.) It only makes sense for them to use the...If you want to get a full essay, order it on our website: Ordercustompaper.com

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