The Following Are the Income Statement, the Assets Section of the Balance

Essay

The following are the income statement, the assets section of the balance sheet, and inventory disclosures from Imagine, Inc., a toy manufacturer, for 2019.

Inventories: Inventories, net of an allowance for excess quantities and obsolescence, are stated at the lower of cost or net realizable value. Cost is determined by the first-in, first-out method.
Required:
a. Compute the inventory turnover for both 2019 and 2018. The 2017 ending inventories were $428,100,000. Interpret and explain the change in inventory turnover as a positive or a negative for the company.
b. Compute the days' sales in inventory for both 2019 and 2018. Discuss what this measures and the importance of this measurement in analyzing company performance.