Question $3$ Please help me answer the question with detailed steps. Thank you!

Richard Enterprise $($RE$)$ uses a periodic inventory system and has just completed a physical

inventory count for the financial year ended $31$ December $2020.$ Some selected items for the

last three financial years are as follows:

Required:

$($i$)$ RE's cost of sales has remained steady but its inventory has increased considerably

over the last two years. What does this information tell you about the company's

inventory turnover? Calculate its inventory turnover and explain your answer.

$($ii$)$ RE purchases its inventory on terms "net $25$ days". Evaluate and comment whether RE

has any potential cashflow problem in $2020.($ii$)$ This indicates that inventory is staying on the shelf for a

time. The

company should probably evaluate the saleability of its inventory.

Payable Outstanding Period $($POP$)$

$2019$: $=$

$2020$: $=$

RE's cash conversion cycle is positive $($average inventory holding period $>$ POP$)$ and its

POP for the last two years $>$ credit period of $25$ days offered by its suppliers.

It seems to be having cash flow problem as it has not been paying its creditors on time.