The following information pertains to two competitors, Mostly Inc. and Hardly Ltd.

Mostly Inc. reported sales revenues of $1,310,000 and Hardly Ltd. reported sales revenues of $2,890,000.

Required

a. Calculate the inventory turnover ratio for Mostly and Hardly.

b. Calculate the gross margin and gross margin ratio for Mostly and Hardly.

c. On the basis of inventory turnover, which company is moving its inventory faster? Does that mean the inventory is better managed? Explain.

d. On the basis of the gross margin ratio, which company is earning a higher profit margin?

e. Which company do you think is better managed? Explain your answer.

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Beginning Inventory Ending Inventor y Cost of Goods Sold Company Mostly Inc. Hardly Ltd. $ 900,000 $1,750,000 $165,000 $565,000 $250,000 $590,000