A company's inventory turnover is one measure of its potential to convert inventory into cash. But what is considered a good inventory turnover? The answer to that question depends on a variety of industry and company characteristics.
Access the EDGAR database at the following Internet address:
www.sec.gov
Locate the most recent 10-K reports of Safeway, Inc., and Staples, Inc. Compute the inventory turnover of each company. Does the higher turnover computed for Safeway mean that the company manages its inventory more effectively than Staples ? Explain.