Question

71 managerial accounting section 26 instructor: petty requirement 1. compute the inventory turnover, days sales in inventory, and gross profit percentage for low corporation for 2025 compute the inventory turnover (round your answer to two decimal places, x.xx.) the inventory turnover = cost of goods sold + average merchandise inventory = 2.91 times compute the days sales in inventory (round interm calculations to two decimal places, x.xx and round your final answer to the nearest whole day) the days sales in inventory = 365 days - inventory turnover = 125 days compute the gross profit percentage (round your answer to the nearest tenth of a percent, x.x %) the gross profit percentage = % balance sheets 365 days + accounts receivable turnover ratio 365 days + inventory turnover 365 days + total current assets cost of goods sold + average merchandise inventory cost of goods sold + net sales revenue gross profit + net sales revenue gross profit + total assets net credit sales + average net accounts receivable net credit sales + net income income statement low corporation income statement years ended may 31, 2025 and 2024 2025 2024 net sales revenue $ 51,200,000 $ 41,000,000 cost of goods sold 25,800,000 20,300,000 interest expense 700,000 140,000 all other expenses 6,700,000 7,300,000 net income $ 23,000,000 $ 4,380,000 print done

Explanation:

Step1: Identify the formula for gross profit percentage

Gross profit percentage is calculated as (Gross profit / Net sales revenue) * 100. First, find gross profit for 2025: Gross profit = Net Sales Revenue - Cost of Goods Sold. For 2025, Net Sales Revenue is $51,200,000 and Cost of Goods Sold is $25,800,000. So gross profit = \( 51200000 - 25800000 = 25400000 \).

Step2: Calculate gross profit percentage

Using the formula (Gross profit / Net sales revenue) * 100, substitute the values: \( \frac{25400000}{51200000} \times 100 \). Calculate \( \frac{25400000}{51200000} \approx 0.4961 \), then multiply by 100 to get \( 0.4961 \times 100 = 49.61\% \), rounded to the nearest tenth of a percent is 49.6%.

Answer:

The formula for gross profit percentage is "Gross profit ÷ Net sales revenue", and the gross profit percentage is 49.6%.