Inventory Analysis The following data were extracted from the income statement of Keever Inc.: Current Year Previous Year Sales $18,500,000 $20,000,000 Beginning inventories 940,000 860,000 Cost of goods sold 9,270,000 10,800,000 Ending inventories 1,120,000 940,000 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 final answers to one decimal place. Assume year. Current Year Previous Year 1. Inventory turnover X X 2. Number of days' sales in inventory X days X days b. The inventory position of the business has deteriorated v . The inventory turnover has decreased v , while the number of days' sales in inventory has increased v . The sales volume ha declined v faster than the inventory, resulting in a deteriorating v inventory position. Feedback Check My Work a.1. Divide the cost of goods sold by the average inventory. Average inventory = (Beginning inventory + Ending inventory) - 2. a.2. Divide the average inventory by the average daily cost of goods sold. Average inventory - (Beginning inventory + Ending inventory) - 2. Average daily cost of goods sold = cost of goods = 365 days. b. Consider the relationship of the accounts involved