You want to own and operate a retail business and before you dive into your own retail store you decide to examine the inventory and sales of two publicly traded retailers. You were able to obtain the following summarized information for Satisfactory Goods Inc. and Money Refunded Ltd.:

		Satisfactory Goods Inc.		Money Refunded Ltd.
Beginning Inventory January 1st, 2019		$ 303,000		$ 554,000
Ending Inventory December 31, 2019		$ 579,000		$ 765,000
Ending Inventory December 31, 2020		$ 781,000		$ 811,000
Cost of Goods Sold December 31, 2019		$ 4,504,285		$ 1,264,734
Cost of Goods Sold December 31, 2020		$ 6,734,288		$ 3,505,485
Sales 2019		$ 6,145,000		$ 3,798,000
Sales - 2020		$ 7,304,000		$ 5,015,000

Calculate the gross margin and gross margin ratio. (Round gross margin ratio to 1 decimal place, e.g. 61.5%.)

		Satisfactory Goods						Money Refunded
		2019			2020			2019			2020
Gross Margin		$			$			$			$
Gross Margin Ratio			%			%			%			%

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Which of the two companies has the higher gross margin ratios?

Money RefundedSatisfactory Goods has the higher gross margin ratio.

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Calculate the inventory turnover ratio and days to sell inventory ratio for the two companies for two years. (Round inventory turnover ratio to 1 decimal place, e.g. 61.5 and days in inventory to 0 decimal places, e.g. 125.)

Satisfactory Goods

Money Refunded

2019

2020

2019

2020

Inventory Turnover Ratio

x

x

x

x

Days in Inventory

days

days

days

days

Which of the two companies is moving inventory faster?

Money RefundedSatisfactory Goods is moving inventory faster.

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