Question

Match the firm to its average number of days to sell inventory ratio.

-       A.       B.       C.       D.       E.	Walmart: Sales $503.9 Cost of Goods Sold $394.6 Inventory $44.4
-       A.       B.       C.       D.       E.	Lowes: Sales $72.1 Cost of Goods Sold $49.2 Inventory $13.2
-       A.       B.       C.       D.       E.	Home Depot: Sales $110.2 Cost of Goods Sold $72.7 Inventory $14.5
-       A.       B.       C.       D.       E.	Target: Sales $78.1 Cost of Goods Sold $54.9 Inventory $9.0
-       A.       B.       C.       D.       E.	Costco: Sales $158.3 Cost of Goods Sold $137.8 Inventory $11.4

A.	41.1 days
B.	72.8 days
C.	97.9 days
D.	59.8 days
E.	30.2 days

Answer 1

Computation of Days to Sale Inventory ratio:

Walmart:

Days to sale Inventory Ratio = (Inventory / Cost of goods sold ) x 365

= ($44.6 / $394.6) x 365

= 41.1 Days.

Lowes:

Days to sale Inventory Ratio = (Inventory / Cost of goods sold ) x 365

= ($13.2 / $49.2) x 365

= 97.9  Days.

Home Depot:

Days to sale Inventory Ratio = (Inventory / Cost of goods sold ) x 365

= ($14.5 / $72.7) x 365

= 72.8 Days.

Target:

Days to sale Inventory Ratio = (Inventory / Cost of goods sold ) x 365

= ($9 / $54.9) x 365

= 59.8 Days.

Costco:

Days to sale Inventory Ratio = (Inventory / Cost of goods sold ) x 365

= ($11.4 / $137.8) x 365

= 30.2 Days.