The following data are from the income statements of Ellen Noodles Company:
|
Sales
|
$6,420,000
|
$6,240,000
|
|
Beginning inventory
|
960,000
|
860,000
|
|
Purchases
|
4,540,000
|
4,661,000
|
|
Ending inventory
|
1,020,000
|
960,000
|
(a) Compute for each year (1) the inventory turnover and (2) the average days to sell the inventory.
(b) What conclusions concerning the management of the inventory can be drawn from these data?