Question:
The following data were taken from the annual reports of Jong Inc. and Hobson Inc.
Cost of goods sold $830,000 (Jong Inc) $11,540,000 (Hobson Inc)
Inventory, end of year $185,000 (Jong) $315,000 (Hobson)
Inventory, beginning of year $235,000 (Jong) $155,000 (Hobson)
A. Determine the inventory Turnover and number of day's sales in inventory for Jong and Hobson, round answer to two decimal places.
B. How would you expect these measures to compare between the companies? Why?
I think I have A right(Jong 3.95 turnover... 92.34 days, Hobson 49.11 turnover...7.43 days), but I dont know what to say for B, any help is greatly appriciated.