f$.$ Inventory turnover is cost of sales divided by average inventory.

Cost of sales

$\frac{2013}{\text{\$}528,043}\frac{2012}{\text{\$}585,897}$

Average Inventories, net

$211,734$

$211,734$

Inventory turnover ratio

$2\mathrm{.}22$ times

$2\mathrm{.}63$ times

g$.$ Inventory holding period $=365$ days$/$inventory turnover ratio:

$2013$:$\frac{365}{2\mathrm{.}22}=164$ days. $2012$:$\frac{365}{2\mathrm{.}63}=139$ days.

The inventory turnover ratio has decreased from $2012$ to $2013$ and the inventory holding period increased suggesting that Callaway manage its inventories less efficiently in $2013$ than it did in $2012.$ Callawa experienced an increase in average inventory $($by approximately $7\%)$ i $2013$ while cost of sales declined in the same period $($by approximatel $10\%.$ Callaway could have experienced a decline in demand near the er of the year that caused year$-$end inventories to increase. alternative explanation could be that Callaway is deliberate stocking more inventory of finished goods and raw material anticipation of increased future sales. Callaway's sales during $20$ increased from $2012$ after a number of years of declines suggest that the second explanation may be plausible.