The cost of goods sold computations for Sooner company and Later Company are shown as below
Instructions
- Compute inventory turnover and days in inventory for each company.
- Which company moves its inventory more quickly?
Solution
a.
Sooner company
Compute inventory turnover and days in inventory:
Compute inventory turnover and days in inventory:
Later company
Compute inventory turnover and days in inventory:
Compute inventory turnover and days in inventory:
b.
Later Company moves its inventory more quickly.