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Provide one recommendation for milo ltd to improve

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Reference no: EM132944123

Milo Ltd and Lucy Ltd are both engaged in the sale of handbags, but they seem to approach it differently according to the following information:
 
                                                                            Ratio Milo Ltd                Lucy Ltd
Average collection period of receivables              21 days                    63 days
Inventory turnover period                                 25 days                    50 days
Gross Margin                                                    20%                             40%

Problem 1: Based on the three financial ratios, describe the possible reasons for the differences in approach between the two businesses.

Problem 2: Provide one recommendation for Milo Ltd to improve its gross margin.

Reference no: EM132944123

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