The financial data for M&G Restaurants Incorporated and Continental Buffet Ltd. for the current year are as follows:

Required

a. Calculate the inventory turnover for each company.

b. Calculate the days to sell inventory ratio for each company.

c. Knowing the type of inventory these companies sell, comment on the reasonableness of the inventory turnover. Which company manages its inventory more efficiently?

d. Which company would be a more profi table investment? Can we tell? Explain.

e. What are the potential problems with fast inventory turnovers? Would these be a concern for M&G Restaurants?

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Annual Cost of Goods Sold Inventory Jan. 1 $ 78,800 191,060 Inventory Dec. 31 M&G Restaurants Continental Buffet $69,560 41,620 $1,382,584 7,543,900