It also shows that the company can effectively sell the inventory it buys. This shows the company does not overspend by buying too much inventory and wastes resources by storing non-salable inventory. Inventory turnover period = inventory amount ÷ sales or cost of sales (monthly or daily) Both are said to be indicators to see if inventory is appropriate. Formula: Inventory turnover ratio is computed by dividing the cost of goods sold by average inventory at cost. The Company posted quarterly revenue of $37.5 billion and quarterly net profit of $7.5 billion, or $8.26 per diluted share. Inventory turnover period The inventory turnover period is an indicator that shows how long it takes to have inventory for days or months, or to consume (sell) all inventory. Inventory turnover: An activity ratio calculated as cost of goods sold divided by inventory. I can only speak based on my own experience and what I observed during my very short time at Apple (four months). Receivables turnover: An activity ratio equal to revenue divided by receivables. In most cases (read: not always), the higher the inventory turnover rate, the better your business goals are being met. Inventory turnover is a measure of how efficiently a company can control its merchandise, so it is important to have a high turn.
What is a good inventory turnover ratio for retail? Inventory turnover ratio (ITR) is an activity ratio and is a tool to evaluate the liquidity of company’s inventory. Apple (NASDAQ:AAPL) CEO Tim Cook has always considered inventory to be "fundamentally evil." The sweet spot for inventory turnover is between 2 and 4. An inventory turnover ratio, also known as inventory turns, provides insight into the efficiency of a company when converting its cash into sales and profits. The turnover did seem medium-high, at least within the group into which I was hired. Average collection period, for Apple Inc 's accouts receivable remained unchanged at 25 days, in the Mar 28 2020 quarter. It measures how many times a company has sold and replaced its inventory during a certain period of time. Receivable Turnover Ratio Comment: Apple Inc 's ability to collect accounts receivable sequentially detoriated to 14.53, but remained above company average. A low inventory turnover may mean either a weak sales team performance or a decline in the popularity of your products. CUPERTINO, California—October 28, 2013—Apple today announced financial results for its fiscal 2013 fourth quarter ended September 28, 2013. Apple Inc.’s inventory turnover ratio improved from Q4 2019 to Q1 2020 and from Q1 2020 to Q2 2020.
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