Refer to the financial statements of Canadian Tire Corporation (Appendix A) and RONA Inc. (on Connect) and the Industry Ratio Report (Appendix B on Connect).
1. Compute the inventory turnover ratio for both companies for the current year. What would you infer from the difference?
2. Compare the inventory turnover ratio for both companies to the industry average. Are these two companies doing better or worse than the industry average in turning over their inventory?