Inventory Analysis

The following data were extracted from the income statement of Keever Inc.:

	Current Year		Previous Year
Sales	$1,270,200		$1,327,100
Beginning inventories	70,738		70,964
Cost of goods sold	635,100		737,300
Ending inventories	63,938		70,738

a. Determine for each year (1) the inventory turnover and (2) the number of days' sales in inventory. Round interim calculations to the nearest dollar and the final answers to one decimal place. Assume 365 days a year.

	Current Year		Previous Year
1. Inventory turnover
2. Number of days' sales in inventory		days		days

b. The inventory position of the business has deteriorated . The inventory turnover has decreased , while the number of days' sales in inventory has increased .