The following account balances are taken from the records of Clarke Inc., a wholesaler:

1. Compute Clarke's inventory turnover ratio for 2016 and 2015.
2. Compute the number of days' sales in inventory for 2016 and 2015. Assume 360 days in a year.
3. Comment on your answers in 1 and 2 relative to the company's management of inventory over the two years.
What problems do you see in its inventory management?

Question

The following account balances are taken from the records of Clarke Inc., a wholesaler:
  
1. Compute Clarke's inventory turnover ratio for 2016 and 2015.
2. Compute the number of days' sales in inventory for 2016 and 2015. Assume 360 days in a year.
3. Comment on your answers in 1 and 2 relative to the company's management of inventory over the two years.
What problems do you see in its inventory management?

Quizplus · Accepted Answer

The Answer of The following account balances are taken from the records of Clarke Inc., a wholesaler:
  
1. Compute Clarke's inventory turnover ratio for 2016 and 2015.
2. Compute the number of days' sales in inventory for 2016 and 2015. Assume 360 days in a year.
3. Comment on your answers in 1 and 2 relative to the company's management of inventory over the two years.
What problems do you see in its inventory management?

The Following Account Balances Are Taken from the Records of Clarke