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

Question:

Use the following information from The Wet Seal, Inc., to analyze the firmâ€™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

Inventory Turnover Ratio
Inventory Turnover RatioThe inventory turnover ratio is a ratio of cost of goods sold to its average inventory. It is measured in times with respect to the cost of goods sold in a year normally. Inventory Turnover Ratio FormulaWhere,... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...