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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 2019 to fill in Part 1 of the table below. Specifically, you need to locate the 10-K fillings and annual reports on: The Home Depot, Inc.: http://corporate.homedepot.com/ and find "Investor Relations" - Lowe's Companies, Inc.: http://www.lowes.com/ and find "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. (b)[2] What is the average number of days that a product typically stays in the two companies' inventories until sold (inventory duration)? (2 decimals) (c)[1] What are the inventory turns per year at these two retailers? (2 decimals) 1 (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 (millions of $) Cost of goods sold (COGS, millions of $) Gross profit (millions of $) Merchandise Inventory (millions of $) Gross profit margin (GPM,%, 2 decimals) Annual inventory cost rate (%, 2 decimals) 24.00% 24.00% Part 2 - Inventory Turns Home Depot Lowe's Inventory duration (days, 2 decimals) Inventory turns (turns per year, 2 decimals) Part 3 - Inventory Costs Home Depot Lowe's A cordless drill ($) $80.00 $80.00 Per-unit inventory holding cost rate (%, 2 decimals) Inventory holding cost ($) Inventory holding cost difference (Lowes - HomeDepot, $) Gross profit ($) Immediate gross profit ($) (e)[2] Regarding equivalent cordless drills with the same unit cost of $80, which retailer has the lower inventory holding cost and by how much? (Dollar amounts) (f) [2] Find the average gross profit on an inventory merchandise investment of $80. Then, find the immediate gross profit (gross profit minus inventory holding cost). 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 2019 to fill in Part 1 of the table below. Specifically, you need to locate the 10-K fillings and annual reports on: The Home Depot, Inc.: http://corporate.homedepot.com/ and find "Investor Relations" - Lowe's Companies, Inc.: http://www.lowes.com/ and find "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. (b)[2] What is the average number of days that a product typically stays in the two companies' inventories until sold (inventory duration)? (2 decimals) (c)[1] What are the inventory turns per year at these two retailers? (2 decimals) 1 (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 (millions of $) Cost of goods sold (COGS, millions of $) Gross profit (millions of $) Merchandise Inventory (millions of $) Gross profit margin (GPM,%, 2 decimals) Annual inventory cost rate (%, 2 decimals) 24.00% 24.00% Part 2 - Inventory Turns Home Depot Lowe's Inventory duration (days, 2 decimals) Inventory turns (turns per year, 2 decimals) Part 3 - Inventory Costs Home Depot Lowe's A cordless drill ($) $80.00 $80.00 Per-unit inventory holding cost rate (%, 2 decimals) Inventory holding cost ($) Inventory holding cost difference (Lowes - HomeDepot, $) Gross profit ($) Immediate gross profit ($) (e)[2] Regarding equivalent cordless drills with the same unit cost of $80, which retailer has the lower inventory holding cost and by how much? (Dollar amounts) (f) [2] Find the average gross profit on an inventory merchandise investment of $80. Then, find the immediate gross profit (gross profit minus inventory holding cost). Which company has the higher immediate gross profit