Inventory Turnover for Wal-Mart and Target the following information summarized from the 2007 annual report of Wal-Mart

Question:

Inventory Turnover for Wal-Mart and Target the following information summarized from the 2007 annual report of Wal-Mart Stores, Inc.

(in millions)

Cost of sales for the year ended January 31:

2007 ............ $264,152

2006 ............. $237,649

Inventories, January 31:

2007 .............. 33,685

2006 .............. 31,910

The following information summarized from the 2006 annual report of Target Corporation:

(In millions)

Cost of sales for the year ended:

February 3, 2007 ........... $39,399

January 28, 2006 ........... $34,927

Inventory

February 3, 2007 ............ 6,254

January 28, 2006 ............ 5,838

Please answer the following question in Excel.

a. Calculate the inventory turnover ratios for Wal-Mart for the year ending January 31, 2007 and Target for the year ending February 3, 2007.

b. Which company appears to be performing better? What other information should you consider to determine how these companies are performing in this regard?

Inventory Turnover Ratio
Inventory Turnover RatioThe inventory turnover ratio is a ratio of cost of goods sold to its average inventory. It is measured in times with respect to the cost of goods sold in a year normally. Inventory Turnover Ratio FormulaWhere,...