The following amounts are available from the 2011 financial statements in the Form 10-K for Nordstrom, Inc.,

Question:

The following amounts are available from the 2011 financial statements in the Form 10-K for Nordstrom, Inc., the fashion retailer. (All amounts are in millions of dollars and January 28, 2012, is the end of the company's 2011 fiscal year.)

Cost of sales and related buying and occupancy costs............$6,592

Merchandise inventories, January 28, 2012..........................1,148

Merchandise inventories, January 29, 2011............................977

Required

1. Compute Nordstrom's inventory turnover ratio for 2011.

2. What is the average length of time it takes to sell an item of inventory? Explain your answer.

3. Do you think the average length of time it took Nordstrom to sell inventory in 2011 is reasonable? What other information do you need to fully answer that question?

Inventory Turnover Ratio
Inventory Turnover RatioThe inventory turnover ratio is a ratio of cost of goods sold to its average inventory. It is measured in times with respect to the cost of goods sold in a year normally. Inventory Turnover Ratio FormulaWhere,... Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...