Chapter 6, Problem 6.3BYP

(a)

(1)

To determine

Inventory: It refers to the total stock of such goods or items which are held by the business organizations with the purpose of sale.

Inventory turnover: It refers to that number of times or rate at which inventory of the firm is purchased and sold during a particular time period.

Days in inventory: It refers to that number of days for which the inventory remains with the company before it is sold.

To determine: On basis of financial statements, inventory turnover of Company A and Company W

(2)

To determine

On basis of financial statement days in inventory for A Company and W Company.

(b)

To determine

The conclusion about inventory management based on results of part (a).