Baker Mfg. Inc. (see Table below) wishes to compare its inventory turnover to those of industry leaders, who have turnover of about 13 times per year and 8% of their assets invested in inventory.
ARROW DISTRIBUTING CORP.
Net revenue $16,500
Cost of sales $13,500
Inventory $ 1,000
Total assets $ 8,600
BAKER MFG. INC.
Net revenue $27,500
Cost of sales $21,500
Inventory $ 1,250
Total assets $16,600
What is Baker’s inventory turnover?
What is Baker’s percent of assets committed to inventory?
How does Baker’s performance compare to the industry leaders?