Calculate the inventory turnover ratio and number of days’ sales in inventory for the company for the latest two years. Obtain the industry averages for these ratios and any other pertinent information from IBISWorld, and analyze the results.
Discuss what each of these ratios tells you about the company’s efficiency in managing its inventory, and how they compare to the industry average.
Identify the major causes of any changes in these ratios, and discuss your assessment of the company based on these changes.
If you are an investor, explain whether or not you are satisfied with the company’s inventory management.
Sample Solution
