Compute for the inventory turnover ratio

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The following data were taken from the income statements of Merlot Company.


2012

2011

Sales revenue

$6,420,000

$6,240,000

Beginning inventory

960,000

840,000

Purchases

4,840,000

4,661,000

Ending inventory

1,020,000

960,000

Compute for each year (a) the inventory turnover ratio and (b) days in inventory. What conclusions concerning the management of the inventory can be drawn from these data?

Reference no: EM13526485

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