Suppose the R Son Company had a cost of goods sold of $1,000,000 in 2010 and $1,200,000 in 2011 Inventory 350000 In 2010 and 500,000 in 2011.
a) Calculate the inventory turnover for each year. Comment on your findings.
b) What would have been the amount of inventories in 2011 if the 2010 turnover ratio had been maintained?