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Inventory turnover and number of days' sales in inventory Financial statement data for years ending December 31 for Tango Company follow: 2017 2016 Cost of goods sold $3,942,000 $3,890,535 Inventories: Beginning of year 781,100 744,600 End of year 861,400 781,100 Required a. Determine the inventory turnover for 2017 and 2016. Round to one decimal place. 2017 2016 Inventory turnover b. Determine the number of days' sales in inventory for 2017 and 2016. Use 365 days and round to one decimal place. 2017 2016 Number of days' sales in inventory days days C. Are the changes in inventory turnover and the number of days' sales in inventory from 2016 to 2017 favorable or unfavorable? Unfavorable Feedback Check My Work a. The inventory turnover ratio indicates how many times a company has sold and replaced inventory during a period. The inventory turnover ratio is calculated by dividing the cost of goods sold for a period by the average inventory for that period. b. Number of days' sales in inventory indicates the average time required for a company to convert its inventory into sales. The calculation of the number of days' sales in inventory is the average inventory for that period divided by the average daily cost of goods sold. C. A high ratio implies either strong sales or large discounts