This information is available for Sheena's Photo Corporation for 2016 and 2017. 2016 ‾ 2017 ‾ Beginning inventory $ 200 , 000 $ 300 , 000 Ending inventory 300 , 000 365 , 000 Cost of goods sold 1 , 200 , 000 1 , 330 , 000 Sales revenue 1 , 600 , 000 1 , 900 , 000 \begin{array} { l r r } & \underline { 2016 } & \underline { 2017 } \ ext { Beginning inventory } & \$ 200,000 & \$ 300,000 \ ext { Ending inventory } & 300,000 & 365,000 \ ext { Cost of goods sold } & 1,200,000 & 1,330,000 \ ext { Sales revenue } & 1,600,000 & 1,900,000\end{array} Beginning inventory Ending inventory Cost of goods sold Sales revenue 2016 $200 , 000 300 , 000 1 , 200 , 000 1 , 600 , 000 2017 $300 , 000 365 , 000 1 , 330 , 000 1 , 900 , 000 InstructionsCalculate inventory turnover days in inventory and gross profit rate for Sheena's Photo Corporation for 2016 and 2017. Comment on any trends.

Question

This information is available for Sheena's Photo Corporation for 2016 and 2017.   2016 ‾ 2017 ‾  Beginning inventory  $ 200 , 000 $ 300 , 000  Ending inventory  300 , 000 365 , 000  Cost of goods sold  1 , 200 , 000 1 , 330 , 000  Sales revenue  1 , 600 , 000 1 , 900 , 000 \begin{array} { l r r }  & \underline { 2016 }  &  \underline { 2017 } \	ext { Beginning inventory }  &  \$ 200,000  &  \$ 300,000 \	ext { Ending inventory }  &  300,000  &  365,000 \	ext { Cost of goods sold }  &  1,200,000  &  1,330,000 \	ext { Sales revenue }  &  1,600,000  &  1,900,000\end{array}  Beginning inventory   Ending inventory   Cost of goods sold   Sales revenue  ​ 2016 ​ $200 , 000 300 , 000 1 , 200 , 000 1 , 600 , 000 ​ 2017 ​ $300 , 000 365 , 000 1 , 330 , 000 1 , 900 , 000 ​   InstructionsCalculate inventory turnover days in inventory and gross profit rate for Sheena's Photo Corporation for 2016 and 2017. Comment on any trends.

Jared Caesar Nacion · Accepted Answer

Final Answer :   The inventory turnover decreased by approximately 17% from 2016 to 2017 while the days in inventory increased by 20% over the same time period. Both of these changes would be considered negative since it's better to have a higher inventory turnover and lower days in inventory. However Sheena's Photo gross profit rate increased by 20% from 2016 to 2017 which is a positive sign.

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