two companies in the same line of commercial operation have the following equipment upon their monetary statements
Company 1 Company 2
Sales $500,000 800,000
costs of products sole 350,000 500,000
inventory, commencement of year 75,000 60,000
inventory, finish of year 25,000 40,000
office lease responsibility 25,000 10,000
Which of the following statements is correct?
A. association 1 has aloft sum distinction comparative measure than association 2
B. association 2 has the reduce net income than association 1
C. association 2 sells the register faster than association 1
D. association 1 has reduce costs of storage as well as reduce investment in register than association 2
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C. company 2 sells its inventory faster than company 1
Inventory turnover = COGS/Ave. inventory
Company 1
Inventory t/o = 350,000/50,000 = 7 times
Company 2
Inventory t/o = 500,000/50,000 = 10 times