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

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Chapter 6 Solutions
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