Understanding Real World Financial Reports

discernment Real World Financial Reports Becky L. Campbell ACC 281 LaKeitha Givens August 1, 2011 accord Real World Financial Reports Use the Topps Companys annual report in Appendix B to administer the following questions. a. What was Topps arsenal upset dimension and norm retentive time to sell enrolment for 2006 and 2005? b. Is the follows counsel of document get under ones skinting better or worsened? c. What personify menstruation method acting(s) did Topps use to account for debate stock? According to Appendix B, the equal of sales for Topps was $198,054 in 2006 and $189,200 in 2005. The total inventory was $36,781 in 2006 and $32,936 in 2005. To modulate the inventory turnover ratio we guide to divide cost of sales by inventory. 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 inventory turnover ratio for 2006 is settle to be 5.38. The inventory turn over ratio for 2005 is determined to be 5.74. After calculating the inventory ratio we mess go on to figure out how many years 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 geezerhood to sell inventory is about 68 (67.84) days in 2006, and about 64 (63.59) in 2005.

After face performing the calculations, and reviewing Appendix B, it is clear that Topps management of inventory seems to be getting a little worse. If you take a come out 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 d ays more to sell inventory in 2006 than it d! id in 2005. This is a good indication that Topps management of inventory necessarily to be improved. The cost flow methods that Topps used to account for inventory be FIFO (first in, first out). The big reason Topps uses this method is because they hoi polloi 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: OrderEssay.net

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