The following information is given for Darwin Duck Down, Inc.

Year 1 Year 2

Sales $1,100,000 $2,000,000

Cost of Goods Sold $600,000 $1,250.000

Average Inventory 350,000 525,000

1. Calculate the gross profit margin for years 1 and 2.

2. Calculate the inventory turnover ratio for years 1 and 2.

3. What is the measured by the inventory turnover ratio and what are the fraud implication?

4. Calculate the average number of days inventory in stock for both years.

5. From these ratios, what if any are your fraud concerns? Be specific.