Computing and Evaluating Inventory Turnover for Two Companies European car makers, Volkswagen Group (headquartered in Wolfsburg, Germany) and Daimler AG

(headquartered in Stuttgart, Germany) report the following information.

Euros in millions Volkswagen Daimler Sales Cost of Goods Sold Inventories Sales Cost of Goods Sold Inventories 2014 . . . . . . . . . . . . . . €202,458 €165,934 €31,466 €129,872 €101,688 €20,864 2015 . . . . . . . . . . . . . . 213,292 179,382 35,048 149,467 117,670 23,760 Required

a. Compute the 2015 inventory turnover and the 2015 gross profit margin (in %) for each of these two companies.

b. Discuss any difference in inventory turnover and gross profit margin between these two companies.
Does the difference confirm expectations given their respective business models? Explain.

c. How could the companies improve inventory turnover?