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): Home Depot Lowe's 2/2/14 2/3/13 1/31/14 2/1/13 $78,812 $74,754 $53,417 $50,521 33,194 Net sales Cost of goods sold Year-end inventory 51,422 48,912 34,941 11,057 10,710 9,127 8,600 Industry averages: Gross profit ratio 33% Inventory turnover ratio 3.7 times 99 days Average days in inventory Required: Calculate the gross profit ratio, the inventory turnover ratio, and the average days in inventory for the two compa- nies for their fiscal years ending in 2014. Compare your calculations for the two companies, taking into account the industry averages.

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): Home Depot Lowe's 2/2/14 2/3/13 1/31/14 2/1/13 $78,812 $74,754 $53,417 $50,521 33,194 Net sales Cost of goods sold Year-end inventory 51,422 48,912 34,941 11,057 10,710 9,127 8,600 Industry averages: Gross profit ratio 33% Inventory turnover ratio 3.7 times 99 days Average days in inventory Required: Calculate the gross profit ratio, the inventory turnover ratio, and the average days in inventory for the two compa- nies for their fiscal years ending in 2014. Compare your calculations for the two companies, taking into account the industry averages.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 56P: The following selected information is taken from the financial statements of Arnn Company for its...

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