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Question
The following data were taken from the annual reports of Big Bang Inc., a manufacturer of fireworks, and Orange Inc., a manufacturer of computers.
| Big Bang Inc. | Orange Inc. | |
| Cost of merchandise sold | $830,000 | $11,540,000 |
| Inventory, end of year | 190,000 | 320,000 |
| Inventory, beginning of year | 240,000 | 290,000 |
a. Determine the (1) inventory turnover and (2) days' sales in inventory for Big Bang and Orange.
Round your answers to two decimal places.
b. How would you expect these measures to compare between the companies? Why?
Answer
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