22 Analysing inventory LOZ ollowing is comparative financial data for JK Martin Company and Stratton Company. All balance sheet data are as of 30 June 2017 and 30 June 2018 JK Martin Company Stratton Companv 2018 2017 2018 2017 $550000 240000 75000 6500 - Net sales $2000000 Cost of goods sold 1100000 Operating expenses305000 Income tax expense 52000 85070 $82 508 16100 $15777 250000 225000 70000 65 600 Property & equipment 525000 500000 140000 125000 65000 75000 35000 30000 ash Inventory Current liabilities Long-term liabilities 109000 88000 29000 24800 Ordinary shares, $10 par 490000 490 000 115000 115000 Retained earnings Required a Prepare a vertical analysis of the 2018 income data for JK 173000 147 520 40756 30 289 Martin Company and Stratton Company. Is one company more profitable than the other? Prepare a horizontal analysis of the 2018 financial data for JK Martin Company and Stratton Company using 2017 as the base year.What does this analysis show? Calculate the inventory turnover and days in inventory ratios for 2018 for JK Martin Company and Stratton Company. Do these ratios change your conclusions about these companies? b c