The following financial information (in US$ millions) is for two major corporations for the three fiscal years ended as follows:

Instructions

a. Calculate the inventory turnover, days sales in inventory, and gross profit margin for each company for fiscal 2019 and 2016.

b. Comment on your findings.

Home Depot reports that approximately 70% of its inventory is valued under the retail inventory method (inventory estimation method) and the remainder is valued at cost. Lowe?s reports that all of its inventory is valued at cost. Does the use of the retail inventory method affect the comparison between companies? Explain.

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January 31, February 1, 2015 January 29, Home Depot, Inc. 2017 2016 Net sales $94,595 $88,519 $83,176 Cost of sales 62,282 58,254 54,222 Profit Inventory 7,957 12,549 7,009 11,809 6,345 11,079 February 3, January 29, January 30, Lowe's Companies, Inc. 2017 2016 2015 Net sales $56,223 $65,017 42,553 $59,074 38,504 Cost of sales 36,665 Profit 3,093 2,546 2,698 Inventory 10,458 9,458 8,911