The following data are from the income statements of Haskin Company.    Year  2017 2016 Sales revenue  $6,420,000 $6,420,000 Beginning inventory 940,000 860,000 Purchases  4,340,000 4,661,000 Ending inventory 1,020,000 940,000 Answer the following questions: Compute for each year (1) the inventory turnover and (2) the days in inventory? What conclusions concerning the management of the inventory can be drawn  from these data?

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Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.