Wal-Mart Stores, Inc., and Target Corporation reported the following in their financial reports: a. Compute the 2017
Question:
Wal-Mart Stores, Inc., and Target Corporation reported the following in their financial reports:
a. Compute the 2017 and 2016 inventory turnovers for each of these two retailers.
b. Discuss any changes that are evident in inventory turnover across years and companies from part a.
c. Describe ways in which a retailer can improve its inventory turnover. Are there ways to increase inventory turnover that are not beneficial to the company's long-term interests?
Wal-Mart Target (S billions) Fiscal Year Sales COGS Inventory Sales COGS Inventory 2017..... 2016... $51.1 49.1 $496 $373 $43.8 $8.66 S71.9 69.5 481 361 43.0 8.31 2015 479 361 44.5 73.8 52.2 8.60
Step by Step Answer:
a b WalMarts inventory turnover rate is higher than Targets There can be several reasons for this Wa...View the full answer
Financial Accounting
ISBN: 9781618533111
6th Edition
Authors: Michelle L. Hanlon, Robert P. Magee, Glenn M. Pfeiffer, Thomas R. Dyckman
Related Video
Inventory turnover is a key metric that helps businesses evaluate the efficiency of their operations. A high turnover ratio is generally considered positive, indicating that the company is effectively selling its inventory and making efficient use of its resources. On the other hand, a low turnover ratio may indicate issues such as overstocking or slow sales and may require further examination to identify and address the underlying causes. Businesses use this ratio to make decisions about inventory levels, production schedules, and pricing strategies. It also helps businesses to identify areas where they may need to make improvements, such as reducing lead times for production or optimizing sales and marketing efforts. Additionally, inventory turnover is used by investors and analysts as a key performance indicator to evaluate the financial health and growth potential of a company.
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