Inventory Turnover and Days Sales in Inventory

The Eastern Corporation installed a new inventory management system at the beginning of Year 1. Shown below are data from the companys accounting records as reported by the new system:

	Year 1	Year 2
Sales revenue	$18,000,000	$20,000,000
Cost of goods sold	8,000,000	8,900,000
Beginning inventory	2,500,000	2,530,000
Ending inventory	2,530,000	2,600,000

Calculate the companys (a) inventory turnover and (b) days sales in inventory for both years. Round all answers to two decimal places. Use rounded answers in subsequent calculations.

	Year 1	Year 2
(a)Inventory turnover
(b) Days' sales in inventory

(c) Based solely on your answers to (a) and (b), did inventory management at Eastern improve or decline in Year 2? AnswerDeclineImprove