Chapter 18, Problem 18.12BE

(a)(1)

To determine

Inventory Turnover Ratio: The inventory turnover ratio refers to the ratio which determines the liquidity of the company. It is a financial ratio which is calculated by dividing the cost of goods sold from the average inventory. It is also called as the stock turnover ratio.

The days in inventory: The days in inventory refers to the number of days in which the company holds its inventory before the sale of it. It is calculated by dividing the number of days in a year by the inventory turnover.

To determine: (a) For each year (1) The inventory turnover and (2) The days in inventory and (b) Conclusions that can be drawn from the data.

(b)

To determine

(b) Conclusions that can be drawn from the data.