Perez Corporation has the following financial data for the years 20X1 and 20X2:

a. Compute inventory turnover based on Ratio 6, Sales/Inventory, for each year.
b. Compute inventory turnover based on an alternative calculation that is used by many financial analysts, Cost of goods sold/Inventory, for each year.
c. What conclusions can you draw from part a and part b?

Transcribed Image Text:

Sales.. Cost of goods sold. Inventory... 20X1 $8,000,000 6,000,000 800,000 20X2 $10,000,000 9,000,000 1,000,000