Using Inventory Analysis Tools AutoZone and O\'Reilly are two competitors in the
ID: 1175303 • Letter: U
Question
Using Inventory Analysis Tools
AutoZone and O'Reilly are two competitors in the retail automotive parts industry.
Use the information above to compute the companies' gross profit margin and days inventory outstanding for both years.
Round answers to one decimal place (ex: 0.2345 = 23.5%).
Explanation / Answer
Auto zone
O’Reilly
2015:
Sales
10498448
8277782
Cost of goods sold
4860309
3804031
Gross profit = Sales – Cost of goods sold
5638139
4473751
Gross profit margin = gross profit / sales * 100
53.7%
=5638139/10498448*100
54.0%
=4473751/8277782*100
2014:
Sales
9786421
7527189
Cost of goods sold
4540406
3507180
Gross profit = Sales – Cost of goods sold
5246015
4020009
Gross profit margin = gross profit / sales * 100
53.6%
=5246015/9786421*100
53.4%
=4020009/7527189*100
Auto zone
O’Reilly
2015:
Average Inventory
3320864
2632898
Cost of Goods sold
4860309
3804031
Days inventory Outstanding = Average inventory /Cost of goods sold * 365
249 days
=3320864/4860309*365
253 days
=2632898/3804031*365
2014:
Average Inventory
3040553
2504914
Cost of Goods sold
4540406
3507180
Days inventory Outstanding = Average inventory /Cost of goods sold * 365
244 days
=3040553/4540406*365
261 days
=2504914/3507180*365
Auto zone
O’Reilly
2015:
Sales
10498448
8277782
Cost of goods sold
4860309
3804031
Gross profit = Sales – Cost of goods sold
5638139
4473751
Gross profit margin = gross profit / sales * 100
53.7%
=5638139/10498448*100
54.0%
=4473751/8277782*100
2014:
Sales
9786421
7527189
Cost of goods sold
4540406
3507180
Gross profit = Sales – Cost of goods sold
5246015
4020009
Gross profit margin = gross profit / sales * 100
53.6%
=5246015/9786421*100
53.4%
=4020009/7527189*100
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