An analyst is comparing financial results at two Canadian companies that only have domestic sales. The Metro Canoe Company manufactures and sells canoes. The Country Ski Company manufactures and sells snow skis. Both companies have about the same gross margins, level of sales, credit policies, and have chosen December 31 as their fiscal year end. Which of the following statements is likely to be correct?

Question

Quizplus · Accepted Answer

Canoes are likely to have a lower inventory turnover period compared to skis because they are less seasonal and can be sold throughout the year, whereas skis are more seasonal and primarily sold in winter.

An Analyst Is Comparing Financial Results at Two Canadian Companies