CP 7-6 Comparing inventory ratios for three companies
The general merchandise retail industry has a number of segments represented by the following companies:
Company Name Merchandise Concept
Costco Wholesale Corporation Membership warehouse
Wal-Mart Discount general merchandise
JCPenney Department store
For a recent year, the following cost of merchandise sold and beginning and ending inventories have been provided from corporate annual reports (in millions) for these three companies:
Costco Wal-Mart JCPenney
Cost of merchandise sold $62,335 $306,158 $11,571
Merchandise inventory, beginning 5,039 35,180 3,641
Merchandise inventory, ending 5,405 34,511 3,259
a. Determine the inventory turnover ratio for all three companies. Round to one decimal place.
b. Determine the number of days” sales in inventory for all three companies. Round to one decimal place.
c. Interpret these results based on each company”s merchandise concept.

CP 7-5 Comparing inventory ratios for two companies

Tiffany Co. is a high-end jewelry retailer, while Amazon.com uses its e-commerce services, features, and technologies to sell its products through the Internet. Recent balance sheet inventory disclosures for Tiffany and Amazon.com (in millons) are as follows:

	End-of-Period Inventory	Beginning-of-Period Inventory
Tiff any Co.	$1,601	$1,242
Amazon.com	1,399	1,200

The cost of merchandise sold reported by each company was as follows:

	Tiff any Co.	Amazon.com
Cost of merchandise sold	$1,215	$14,896

a. Determine the inventory turnover and number of days’ sales in inventory for Tiffany and Amazon.com. Round to two decimal places and nearest day.

b. Interpret your results.