Use the Following Information That Was Obtained from the 2018\[\text { A) Compute the number of days' sales in inventory for each company for } 2018 \text {. }\]

The Answer of Use the Following Information That Was Obtained from the 2018\[\text { A) Compute the number of days' sales in inventory for each company for } 2018 \text {. }\]

Use the Following Information That Was Obtained from the 2018\[\text { A) Compute the number of days' sales in inventory for each company for } 2018 \text {. }\]

The Answer of Use the Following Information That Was Obtained from the 2018\[\text { A) Compute the number of days' sales in inventory for each company for } 2018 \text {. }\]

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Use the Following Information That Was Obtained from the 2018

question 198

Essay

Use the following information that was obtained from the 2018 and 2017 financial statements of Pacific Company,River Corporation,and Ocean Company to answer the questions that follow.
Required
Compare the three companies and answer the following:
$\begin{array}{lrrrr}\text { (in millions) } && \underline{\text { Pacific }} & \underline{\text { River }}& \underline{\text { Ocean }}\\\text { Accounts receivable } & \text { December } 31,2018 & \$ 33,000 & \$ 22,000 & \$ 41,500 \\& \text { December } 31,2017 & 30,000 & 12,800 & 42,600 \\\text { Inventory } & \text { December } 31,2018 & 22,600 & 12,600 & 54,200\\& \text { December 31,2017 } & 23,900 & 32,800 & 44,000 \\\text { Net sales (Credit) } & 2018 & 620,000 & 320,000 & 510,000\\& 2017 & 610,000 & 310,000 & 760,000 \\\text { Cost of goods sold } & 2018 & 211,000 & 406,000 & 311,000 \\& 2017 & 156,000 & 200,000 & 310,000\end{array}$
$\text { A) Compute the number of days' sales in inventory for each company for } 2018 \text {. }$
B) Which company appears to have the best liquidity position based solely on the inventory analysis? Explain. $\text { C) What information is provided to users with your calculations in part (A)? }$

Definitions:

Magnuson-Moss Act

A federal law enacted in 1975 to protect consumers from deceptive warranty practices, applying primarily to consumer products.

Express Warranty

A seller's promise or guarantee that a product will meet a specified level of quality and reliability.

Implied Warranty

An implied warranty is an unstated guarantee that a product will meet a minimum level of quality and functionality, as per the law or industry standards.

Substitute Goods

Products or services that can serve as replacements for each other; demand for one increases when the price of the other rises.