The Following Data Are Available for Martin Solutions, Inc

question 145

Essay

The following data are available for Martin Solutions, Inc. 1) Determine for each year:
a) The inventory turnover
b) The number of days' sales in inventory Round intermediate calculation to the nearest whole number and your final answer to one decimal place).
2) What conclusions can be drawn from these data concerning the inventories?

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Definitions:

Depreciation Expense

Methodically spreading out the expense of a physical asset across its period of usability.

Capital Lease

A lease classified as a purchase by the lessee, whereby the lessee records the leased asset as an owned asset on the balance sheet.

Bargain Purchase Option

A lease agreement provision allowing the lessee to purchase the leased asset at a price significantly lower than its expected fair market value at the end of the lease term.

Long-term Liability

A long-term liability is a financial obligation of a company that is due beyond one year, such as bonds payable, long-term leases, and pension obligations.