Chapter 6, Problem 6.4BDIE

To determine

Inventory turnover ratio:

Inventory turnover ratio is a financial measure that is used to evaluate as to how many times a company sells or uses its inventory, during an accounting period. It is calculated by using the following formula:

$\boxed{\text{Inventory turnover}=\frac{\text{Cost of goods sold}}{\text{Average inventory}}}$

Days’ sales in inventory:

Days’ sales in inventory are used to determine number of days a particular company takes to make sales of the inventory available with them.

$\boxed{\text{Day's sales in inventory}=\frac{\text{Days in accounting period}}{\text{Inventory turnover}}}$

The inventory turnover ratio, and days in inventory for Company C for 2018, and 2019.

To determine

To discuss: The changes in the amount of inventory, the inventory turnover, and days in inventory, and the amount of sales revenue across the two years.