The table below contains selected information from recent financial statements o

Question

The table below contains selected information from recent financial statements of The Home Depot, Inc., and Lowe’s Companies, Inc., two companies in the home improvement retail industry ($ in millions):

  

Calculate the gross profit ratio, the inventory turnover ratio, and the average days in inventory for the two companies using the most recent fiscal year data. (Use 365 days a year. Round your answers to 2 decimal places.)

Need to show numerator and denomenator for each

Home Depot Lowe's 1/30/11 1/31/10 1/28/11 1/29/10   Net sales $ 67,997 $ 66,176 $ 48,815 $ 47,220   Cost of goods sold 44,693 43,764 31,663 30,757   Year-end inventory 10,625 10,188     8,321   8,249

Explanation / Answer

Particulars Home depot Lowe's Net sales (A) 67997 48815 Cost of Goods Sold(B) 44693 31663 Gross Profit C= A-B 23304 17152 Gross profit ratio D = C/A 0.342721002 0.351367408 Average inventory (E) 20813 16570 (10625+10188) (8321+8249) Inventory Turnover ratio F = (A/E) 3.267044636 2.945986723 Average days in inventory 365/F 111.7217671 123.8973676 days days

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