Use the following information from The Wet Seal, Inc., to analyze the firms inventory management. Calculate the

Use the following information from The Wet Seal, Inc., to analyze the firm’s inventory management. Calculate the gross profit ratio and the inventory turnover ratio for each year. How do you think Wet Seal is managing its inventory? What other information would be useful in answering this question?

From the balance sheet at January 31, 2009
Inventory $25,529 (in thousands)
From the balance sheet at February 2, 2008
Inventory $31,590
From the balance sheet at February 3, 2007
Inventory $34,231
From the balance sheet at January 28, 2006
Inventory$25,475

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The Wet Seal, Inc. Consolidated Statements of Operations (In thousands) Fiscal Years Ended January 3, February 2, February 3, 2008 2009 2007 400,521 408,892 202,271 177,468 370,888 193,436 178,703 (730) 425 15,038 4,387 Selling, general, and administrative expenses Store-closure costs 154,671 . 5,546 19,257 5,489 1.136) 4,353 23,610 378 Operating income 32,157 2,182 863) (681) Interest (expense) income, net Income (loss) before provision for income taxes Provision for income taxes Net income (loss) (12,530) 308 $ 30,154 23,232 2838) 31,476 . . 1,322 .. .._......... ..