Refer to the financial statements and related disclosure notes of PetSmart in Appendix B located at the

Question:

Refer to the and related disclosure notes of PetSmart in Appendix B located at the back of the text.
Required:
1. What inventory method(s) does PetSmart use to value its inventories?
2. In addition to the purchase price, what additional expenditures does the company include in the initial cost of merchandise?
3. Calculate the gross profit ratio and the for the fiscal year ended February 2, 2014.
Compare PetSmart's ratios with the industry averages of 41% and 7.7 times.
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...