Yamaha Corporation and Pioneer Corporation are two large, diversified Japanese electronics companies. Both use the average-cost method and the lower-of-cost-or-market rule to account for inventories. The following data are for their 2008 fiscal years (in millions of yen):

Assume you have been asked to analyze the inventory efficiency of the two companies. Prepare a memorandum to your boss that compares the inventory efficiency of Yamaha and Pioneer by computing the inventory turnover and days’ inventory on hand for both companies in 2009. Show and comment on the relative efficiency of the two companies. Also comment on how the inventory method would affect your evaluation if you were to compare Yamaha and Pioneer to each other and to a U.S. company given the fact that most companies in the United States use the LIFO inventory method. Mention what could be done to make the results comparable.

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Yamaha Pioneer ¥104,876 84,886 477,965 Beginning inventory Ending inventory Cost of goods sold ¥ 76,304 80,694 290,381