Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN: 9781305654174
Author: Gary A. Porter, Curtis L. Norton
Publisher: Cengage Learning
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Textbook Question
Chapter 13, Problem 13.4E
Inventory Analysis
The following account balances are taken from the records of Lewis Inc., a wholesaler of fresh fruits and vegetables:
Required
- Compute Lewis’s inventory turnover ratio for 2016 and 2015.
- Compute the number of days’ sales in inventory for 2016 and 2015. Assume 360 days in a year.
- Comment on your answers in parts (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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