Callahan Company reported the following information for the current year:
Net sales revenue ............................. $280,000
Cost of goods sold ............................. 120,000
Beginning inventory .............................. 5,000
Ending inventory ................................ 10,000
Required:
1. Compute Callahan's
(a) Gross profit ratio,
(b) Inventory turnover ratio, and
(c) Average days to sell inventory. (Round all answers to two decimal places.)
2. Explain the meaning of each number.