The following data were taken from the income statements of Merlot Company.
|
2012
|
2011
|
|
Sales revenue
|
$6,420,000
|
$6,240,000
|
|
Beginning inventory
|
960,000
|
840,000
|
|
Purchases
|
4,840,000
|
4,661,000
|
|
Ending inventory
|
1,020,000
|
960,000
|
Compute for each year (a) the inventory turnover ratio and (b) days in inventory. What conclusions concerning the management of the inventory can be drawn from these data?