QUESTION 21 (10 points) - Inventory Turns and Inventory Costs We are comparing The Home Depot, Inc. and Lowe's Companies, Inc., the two giant retailers in home & construction products and services, regarding their inventory turns and inventory costs. (a) [2] You need to find official corporate data for 2020 to fill in Part 1 of the table below. Specifically, you need to locate the 10-K fillings or annual reports on: - The Home Depot, Inc.: https://ir.homedepot.com/ - Lowe's Companies, Inc.: https://corporate.lowes.com/investors Assume that price and inventory turns are independent of each other; and there are 365 days of operations in a year. In addition, the annual inventory holding cost rate is provided in the table. For Part 2 and Part 3, show equations and calculations, and complete the table. 1 (b)[2] What is the average number of days that a product typically stays in the two companies' inventories until sold (inventory duration or days of supply)? (2 decimals) (c)[1] What are the inventory turns per year at these two retailers? (2 decimals) (d)[1] What are the per-unit inventory cost rates at the two companies? (%, 2 decimals) Part 1 - Indicators Home Depot Lowe's End of fiscal year (date) Net sales (NS, millions of $) Cost of goods sold (COGS, millions of $) Gross profit (GP, millions of $) Merchandise Inventory (INV, millions of $) Gross profit margin (GPM, %, 2 decimals) Annual inventory cost rate (AIHCR, %, 2 decimals) 25.00% 25.00% Part 2 - Inventory Turns Home Depot Lowe's Inventory duration (days, 2 decimals) Inventory turns (turns per year, 2 decimals) Part 3 - Inventory Costs Home Depot Lowe's Cost of a cordless drill (C, $) $90.00 $90.00 Per-unit inventory holding cost rate (PUIHCR, %, 2 decimals) Inventory holding cost (HC, $) Inventory holding cost difference (Lowes - Home Depot, $) Gross profit (GP-item, $) Immediate gross profit (IGP) ($) (e)[2] Regarding equivalent cordless drills with the same unit cost of $90, which retailer has the lower inventory holding cost and by how much? (Dollar amounts) (1)[2] Find the average gross profit on an inventory merchandise investment of $90. Then, find the immediate gross profit (gross profit minus inventory holding cost) of the item. Which company has the higher immediate gross profit? QUESTION 21 (10 points) - Inventory Turns and Inventory Costs We are comparing The Home Depot, Inc. and Lowe's Companies, Inc., the two giant retailers in home & construction products and services, regarding their inventory turns and inventory costs. (a) [2] You need to find official corporate data for 2020 to fill in Part 1 of the table below. Specifically, you need to locate the 10-K fillings or annual reports on: - The Home Depot, Inc.: https://ir.homedepot.com/ - Lowe's Companies, Inc.: https://corporate.lowes.com/investors Assume that price and inventory turns are independent of each other; and there are 365 days of operations in a year. In addition, the annual inventory holding cost rate is provided in the table. For Part 2 and Part 3, show equations and calculations, and complete the table. 1 (b)[2] What is the average number of days that a product typically stays in the two companies' inventories until sold (inventory duration or days of supply)? (2 decimals) (c)[1] What are the inventory turns per year at these two retailers? (2 decimals) (d)[1] What are the per-unit inventory cost rates at the two companies? (%, 2 decimals) Part 1 - Indicators Home Depot Lowe's End of fiscal year (date) Net sales (NS, millions of $) Cost of goods sold (COGS, millions of $) Gross profit (GP, millions of $) Merchandise Inventory (INV, millions of $) Gross profit margin (GPM, %, 2 decimals) Annual inventory cost rate (AIHCR, %, 2 decimals) 25.00% 25.00% Part 2 - Inventory Turns Home Depot Lowe's Inventory duration (days, 2 decimals) Inventory turns (turns per year, 2 decimals) Part 3 - Inventory Costs Home Depot Lowe's Cost of a cordless drill (C, $) $90.00 $90.00 Per-unit inventory holding cost rate (PUIHCR, %, 2 decimals) Inventory holding cost (HC, $) Inventory holding cost difference (Lowes - Home Depot, $) Gross profit (GP-item, $) Immediate gross profit (IGP) ($) (e)[2] Regarding equivalent cordless drills with the same unit cost of $90, which retailer has the lower inventory holding cost and by how much? (Dollar amounts) (1)[2] Find the average gross profit on an inventory merchandise investment of $90. Then, find the immediate gross profit (gross profit minus inventory holding cost) of the item. Which company has the higher immediate gross profit