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Strategies & Market Trends : The Rational Analyst
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To: HeyRainier who wrote (1490)10/24/1998 3:08:00 AM
From: HeyRainier   of 1720
 
[ RADAF: A correction ]

I wish to correct the figures for Inventory Turnover in the previous post. After re-examining the figures, it appears that I had directed one of my Excel links to the incorrect inventory cell for calculation of average inventory; and extending the cells sheet-wide to recreate the same formula for other cells only compounded the error.

Here is how I calculated Inventory Turnover:

Inventory turnover = (Cost of goods sold)/(Average Inventory)

Average Inventory = (Beginning Inventory + Ending Inventory)/2

The corrected figures for Inventory Turnover are as follows:

Qtr.....1997.....1998
---------------------
Q1......N/A.....4.14
Q2......2.89.....3.77
Q3......2.96.....3.25
Q4......3.60.....N/A

Sorry for the confusion. Please note however that even with the revised figures, the relationship I provided in my previous argument still holds. It appears that the trend for inventory turnover took a U-turn for 1998.

RT
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