Financial statement data for years ending December 31 for Holland Company follow:
_______________________________ 20Y4 _______________ 20Y3
Cost of merchandise sold ............ $4,504,500 ............ $3,715,200
Inventories:
Beginning of year ....................... 788,000 ................. 760,000
End of year .............................. 850,000 ................. 788,000
a. Determine the inventory turnover for 20Y4 and 20Y3.
b. Determine the days' sales in inventory for 20Y4 and 20Y3. Use 365 days and round to one decimal place.
c. Does the change in inventory turnover and the days' sales in inventory from 20Y3 to 20Y4 indicate a favorable or an unfavorable trend?