Inventory Analysis
A recent income statement of Walmart reports sales of $405,046 million and costof goods sold of $304,657 million for the year ended January 31,2010. The comparable sales and cost of goods sold figures for the year ended one year earlier were $401,087 million and $304,056 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 Walmart stores. In fact, in the January 31,2010, balance sheet, inventory is presented at $33,160 million and the comparable figure for a year earlier is $34,511 million.
a. Compute the inventory turn over for Walmart for both years.
b. Compute the average number of days required byWalmart to sell its inventory for the same years.
c. In which year was the company more efficient in its maaagement of inventory? Explain your answer.
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