Perez Corporation has the following financial data for the years 20X1 and 20X2: ...................................................20X1................20X2 Sales......................................$8,000,000.........$10,000,000 Cost of

Question:

Perez Corporation has the following financial data for the years 20X1 and 20X2:

...................................................20X1................20X2

Sales......................................$8,000,000.........$10,000,000

Cost of goods sold.......................6,000,000............9,000,000

Inventory....................................800,000............1,000,000

a. Compute inventory turnover based on ratio number 6, Sales/Inventory, for each year.

b. Compute inventory turnover based on an alternative calculation that is used by many financial analysts, Cost of goods sold/Inventory, for each year.

c. What conclusions can you draw from part a and part b?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...