The table below contains selected information from recent financial statements of The Home Depot, Inc., and Lowe’s Companies, Inc., two companies in the home improvement retail industry ($ in millions):

Required:
Calculate the gross profit ratio, the inventory turnover ratio, and the average days in inventory for the two companies for their fiscal years ending in 2020. Compare your calculations for the two companies, taking into account the industry averages.

Transcribed Image Text:

Net sales Cost of goods sold Year-end inventory Industry averages: Gross profit ratio Inventory turnover ratio Average days in inventory Home Depot 2/2/2020 $110,225 72,653 14,531 27.25% 2/3/2019 $108,203 71,043 13,925 3.63 times 101 days Lowe's 1/31/2020 $72,148 49,205 13,179 2/1/2019 $71,309 48,401 12,561