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Provide one recommendation for milo ltd to improve gross

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Reference no: EM132945502

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: EM132945502

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