Analyzing Inventory

Examining the recent financial statements of McLelland Clothing, Inc., you note the following:

Sales	$754,693
Cost of goods sold:
Computed under FIFO	518,200
Computed under LIFO	551,800
Average inventory:
Computed under FIFO	76,900
Computed under LIFO	45,800

Required:

1. Calculate McLelland's gross profit ratio (rounded to two decimal places), inventory turnover ratio (rounded to three decimal places), and the average days to sell inventory (assume a 365-day year and round to two decimal places) using the FIFO inventory costing method.

Gross profit ratio	How to find it?
Inventory turnover ratio	How to find it
Average days to sell inventory	How many days?

2. Calculate McLelland's gross profit ratio (rounded to two decimal places), inventory turnover ratio (rounded to three decimal places), and the average days to sell inventory (assume a 365-day year and round to two decimal places) using the LIFO inventory costing method.

Gross profit ratio	How to find it?
Inventory turnover ratio	How to find it?
Average days to sell inventory	How many days?

3. Conceptual Connection: Which ratiosthe ones computed using FIFO or LIFO inventory valuesprovide the better indicator of how successful McLelland was at managing and controlling its inventory?