Refer to the financial statements of The Home Depot in Appendix A and Lowe's in Appendix B

Question:

Refer to the of The Home Depot in Appendix A and Lowe's in Appendix B at the end of this book, or download the annual reports from the Cases section of the text's Web site at www.mhhe.com/phillips4e.
1. Does Lowe's hold more or less inventory than The Home Depot at the end of January 2011?
2. Does Lowe's follow the lower of cost or market rule? What method does Lowe's use to determine the cost of its inventory? Comment on how this affects comparisons you might make between Lowe's and The Home Depot's s.
3. Compute to one decimal place Lowe's and days to sell for the 2010-11 fiscal year and compare to The Home Depot's. What does this analysis suggest to you?
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...