Zawale Ltd. (Zawale) is a wholesaler of fresh fruits and vegetables. Zawale purchases fruits and vegetables from growers and supplies them to small grocery stores. You have been provided with the following information from Zawale’s accounting records (Zawale’s year-end is December 31):

Required:

a. Calculate Zawale’s inventory turnover ratio and average number of days inventory on hand for 2013, 2014, and 2015.

b. Evaluate how well Zawale’s management is managing the inventory. Explain.

c. What are some possible explanations for the results you found in

(a) and (b)?

d. What are the implications for Zawale’s performance of the results you found in (a)? Explain.

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2012 2013 2014 Inventory (on December 31) $109,688 $ 123,188 $ 121,500 Cost of sales (for the year ended) 7,087,500 7,969,500 2015 $ 141,375 9,463,781