B. (5 points) currently, some of baryla's inventory includes $2.3 million of outdated and damaged goods that simply remain in inventory and are not salable. what inventory ratio must the good inventory maintain in order to achieve an overall turnover ratio of at least 6.3 (including the unsalable items)? (round to one decimal place.)

8.7

Explanation:

Sales = $93,000,000

Gross profit margin = 45%

Gross profit= 45%*93,000,000 = $41,850,000

Gross profit = sales - cost of goods sold

Cost of goods sold = Gross profit + sales = 41,850,000 + 95,000,000 = $53,150,000

Inventory turnover = cost of goods sold/inventory

Inventory = $52,250,000/6.3= $8,436,508

Given:

Total Inventory = $8,436,508

Unsalable items = $2,300,000

We have the formula:

Good inventory = Total Inventory - Unsalable items = $8,436,508 - $2,300,000 = $6,136,508

The inventory turnover ratio the good inventory must maintain in order to achieve an overall turnover ratio of at least 6.3 (including the unsalable items) is  

53,150,000/6,136,508 = 8.7

cognitive overload: having a lot on your mind impairs decision-making and tends to result in the simplest, but not necessarily best, option being selected.

empathy gaps: overlooking how you might feel in a different situation can result in unnecessary purchases, such as overbuying when shopping for food on an empty stomach.

optimism and overconfidence: wearing rose-tinted glasses and having unrealistic expectations about the future can affect money management and leave you unprepared for a change in circumstance.

instant gratification: seeking instant gratification drives impulsive spending and can undermine long-term planning and savings.

harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.

social norms: we are heavily influenced by the actions of others; while this can be in certain circumstances, it also contributes to the pressure to keep up with the joneses through conspicuous consumption.

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