M20-21. Inventory Ratio Calculations

Sanchez LTD. Provide the following data for 2016 and 2017:

Inventory

December 31, 2015..........$352,000

December 31, 2016..........$555,000

December 31, 2017..........$388000

Cost of Goods Sold

2016....................................$1,172,000

2017....................................$1,258,000

Gross Margin

2016....................................$512,000

2017....................................$574,000

Required

(round all calculations to two decimal places)

a) Calculate the inventory turnover ratio for 2016 and 2017.

b) Calculate the gross margin return on inventory investment for 2016 and 2017.