The Following Account Balances Are Taken from the Records of Clarke

question 14

Essay

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?

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