You are an insurance adjuster handling commercial claims. You are working on a claim related to a warehouse fire, which resulted in the destruction of the client’s warehouse and all of its contents. As part of the support for its claim for the inventory that was destroyed, the client submitted an estimate prepared using the gross margin estimation method.

Required

Explain what additional information you would likely request from the client to support their estimate. Identify any concerns you may have with using the estimate to determine the cost of the inventory destroyed in the fire.