The general merchandise retail industry has a number of segments represented by the following companies:
Company Name Merchandise Concept
Costco Wholesale Corporation Membership warehouse
Wal-Mart Discount general merchandise
JCPenney Department store
For a recent year, the following cost of merchandise sold and beginning and ending inventories have been provided from corporate annual reports for these three companies:
|
|
Costco
|
Wal-Mart
|
JCPenney
|
|
Cost of merchandise sold
|
$42,092
|
$219,793
|
$11,285
|
|
Merchandise inventory, beginning
|
3,339
|
26,612
|
3,156
|
|
Merchandise inventory, ending
|
3,644
|
29,447
|
3,169
|
a. Determine the inventory turnover ratio for all three companies.
b. Determine the number of day's sales in inventory for all three companies.
c. Interpret these results based upon each company's merchandise concept.