Computing and Evaluating Inventory Turnover

Walmart Inc., and Target Corporation reported the following in their financial reports:

$($$ billions$)$WalmartTargetFiscal YearSalesCOGSInventorySalesCOGSInventory$2020$$$519\mathrm{.}9$$$394\mathrm{.}6$$$44\mathrm{.}4$$$77\mathrm{.}1$$$54\mathrm{.}9$$$9\mathrm{.}02019510\mathrm{.}3385\mathrm{.}344\mathrm{.}374\mathrm{.}453\mathrm{.}39\mathrm{.}52018495\mathrm{.}8373\mathrm{.}443\mathrm{.}871\mathrm{.}851\mathrm{.}18\mathrm{.}6$

a$.$ Compute the $2020$ and $2019$ inventory turnovers for each of these two retailers.

Inventory TurnoverNumerator $($$ billions$)$Denominator $($$ billions$)$ResultCOGS$$Average InventoryWalmart $2019$Answer $1$Answer $2=$Walmart $2020$Answer $3$Answer $4=$Target $2019$Answer $5$Answer $6=$Target $2020$Answer $7$Answer $8=$

b$.$ Discuss any changes that are evident in inventory turnover across years and companies from part a$.$

Walmart$$s inventory turnover rate is Answer $9$HigherLower than Target$$s$.$ Walmart does report a Answer $10$HigherLower gross profit margin than Target. Both companies had slight Answer $11$IncreasesDecreases in turnover rates from $2019$ to $2020.$ At the end of $2020,$ both companies hold roughly the same inventory than in the prior year.

c$.$ Describe ways in which a retailer can improve its inventory turnover.

Inventory turns improve as the dollar volume of goods sold Answer $12$IncreasesDecreases relative to the dollar volume of goods on hand. Inventory reductions can be realized by Answer $13$IncreasingReducing the depth and breadth of product lines carried $($e$.$g$.,$ not every style, size and color$),$ Answer $14$CreatingEliminating slow$-$moving product lines, working with suppliers to arrange for delivery Answer $15$When neededFor holding, and marking Answer $16$UpDown goods for sale at the end of product seasons.