Inventory turnover and number of days’ sales in inventory Obj. 7 Financial statement data for two years ending December 31 for Holland Company follow:

20Y4 20Y3 Cost of goods sold $4,504,500 $3,715,200 Inventories:

Beginning of year 788,000 760,000 End of year 850,000 788,000

a. Determine the inventory turnover for 20Y4 and 20Y3.

b. Determine the number of days’ sales in inventory for 20Y4 and 20Y3. Use 365 days and round to one decimal place.

c. Are the changes in the inventory turnover and number of days’ sales in inventory from 20Y3 to 20Y4 favorable or unfavorable?

AppendixLO1