The Following Data Are Available for Martin Solutions, Inc

question 140

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:

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a particular period.

Sales On Account

Transactions where goods or services are sold with payment to be received at a later date, typically recorded as accounts receivable.

Cost Of Goods Sold

The total cost associated with making or acquiring any goods sold during a reporting period, including materials, labor, and overhead expenses.

Average Collection Period

The average number of days it takes for a company to collect payment from its credit sales.