A recent income statement of Wal- Mart reports sales of $ 374,526 million and co
ID: 2366188 • Letter: A
Question
A recent income statement of Wal- Mart reports sales of $ 374,526 million and cost of goods sold of $ 286,515 million for the year ended January 31, 2008. The comparable sales and cost of goods sold figures for the year ended one year earlier were $ 344,992 million and $ 264,152 million, respectively. As you would expect, to be able to achieve this high level of sales, a great deal of inventory must be maintained so that customers will find what they want to buy when they shop in Wal- Mart stores. In fact, in the January 31, 2008, balance sheet, inventory is presented at $ 35,180 million and the comparable figure for a year earlier is $ 33,685 million. a. Compute the inventory turnover for Wal- Mart for both years. b. Compute the average number of days required by Wal- Mart to sell its inventory for the same years. c. In which year was the company more efficient in its management of inventory? Explain your answer.Explanation / Answer
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