Captain Geech Boating Company sells fishing boats to fishermen. Its beginning and ending inventories for 2012 are $505 million and $715 million, respectively. It had cost of goods sold of $2,005 million for the year ended December 31, 2012. Merchant Marine Company also sells fishing boats. Its beginning and ending inventories for the year 2012 are $150 million and $110 million, respectively. It had cost of goods sold of $1,100 million for the year ended December 31, 2012.

Required:

1. Calculate the inventory turnover and number of days’ sales in inventory for the two companies.

2. Interpretive Question: Are the results of these ratios what you expected? Which company is managing its inventory more efficiently?