 # Ratio

Avg Inventory \$2 Sales \$25 Avg Inventory processing period 60 What is Gross Profit (pls show calculation)

Is GP 12.83?

shahravi123 Wrote: ------------------------------------------------------- > Avg Inventory \$2 > Sales \$25 > Avg Inventory processing period 60 > > What is Gross Profit (pls show calculation) \$12.9 ??? first step is to find inventory turns, then CGS, then GP GP = revs- COGS

60 = 365/Inventory turnover inventory turnover = 365/60 cogs/avg. inventory = 365/60 cogs = 365*2/60 gross profit = 25 - 365*2/60 = 12.83

\$13

supersharpshooter Wrote: ------------------------------------------------------- > 60 = 365/Inventory turnover > > inventory turnover = 365/60 > > cogs/avg. inventory = 365/60 > > cogs = 365*2/60 > > gross profit = 25 - 365*2/60 = 7.83 hmmm, i think 12.9… please post real answer

I used 360 for year!!

supersharpshooter Wrote: ------------------------------------------------------- > 60 = 365/Inventory turnover > > inventory turnover = 365/60 > > cogs/avg. inventory = 365/60 > > cogs = 365*2/60 > > gross profit = 25 - 365*2/60 = 12.83 you CHANGED YOU ANSWER!!! HA HA : )

yeah i keyed in 20 - the answer is 12.83

\$12.83 Av Inverntory Processing Period: 60 days DOH = #days in period/inventory turnover so… inventory turnover = 365/60 = 6.08 Inventory turnover = COGS/inventory so… COGS = 6.08 * 2 = 12.167 GP = Sales - COGS = 25 - 12.167 = 12.83

daj224 Wrote: ------------------------------------------------------- > supersharpshooter Wrote: > -------------------------------------------------- > ----- > > 60 = 365/Inventory turnover > > > > inventory turnover = 365/60 > > > > cogs/avg. inventory = 365/60 > > > > cogs = 365*2/60 > > > > gross profit = 25 - 365*2/60 = 12.83 > > > you CHANGED YOU ANSWER!!! HA HA : ) You got to it though!!! hahaha by the time i clicked on “Quote this Message” the answer was changed!!! Answer Gross profit margin is 51%

12.833333333333 camp here

> Gross profit margin is 51% WRONG! question asked about Gross profit .

thanks everyone ! You guys are AWESOME ! I started using this site before 2 weeks…BIG MISTAKE…I SHOULD HAVE BEEN USING THIS SINCE LAST 6 months…

shahravi123 Wrote: ------------------------------------------------------- > Answer > Gross profit margin is 51% correct, bonus time: does FIFO in inflation times boost or lower my GP? 12 secs

FIFO will result in lower COGS in inflation period, so higher GP