The following selected information has been compiled for Sherwood Park Inc. Sherwood Park owns a series of discount clothing stores in Western Canada.

You are the new accountant hired by Sherwood Park. The owner tells you that, based on sales growth, the company is doing so well that expansion plans are under discussion.

Required 

a. Calculate the: 

i. inventory turnover for 2023 and 2024 

ii. number of days sales in inventory for 2023 and 2024 

iii. gross margin and gross margin ratio for 2022, 2023, and 2024 

b. Do you agree with the owner about the success of Sherwood Park? If not, what do your calculations show that contradicts the owner’s opinion?

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Inventories Sales revenue Cost of goods sold 2024 $1,410,000 6,046,000 4,970,000 2023 $1,300,000 5,500,000 4,490,000 2022 $ 800,000 4,160,000 3,300,000