Palmer Co. had cost of goods sold of $7,576, ending inventory of $2,270, and average inventory of $2,167. Calculate the inventory turnover. Calculate the day’s sales in inventory. What do these ratios tell you about inventory management at Palmer Co. if the industry average is a turnover of 3.3 and the day’s sales in inventory is 130 days?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Palmer Co. had cost of goods sold of $7,576, ending inventory of $2,270, and average inventory of $2,167.

  1. Calculate the inventory turnover.

  2. Calculate the day’s sales in inventory.
  3. What do these ratios tell you about inventory management at Palmer Co. if the industry average is a turnover of 3.3 and the day’s sales in inventory is 130 days?
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