Inventory Turnover for Apple Computer and Hewlett-Packard The following information was summarized from the fi scal year 2008 annual report of Apple Computer, Inc.:

(in millions)

Cost of sales for the year ended:

September 27, 2008 $21,334 September 29, 2007 15,852 Inventories:

September 27, 2008 509 September 29, 2007 346 Net sales for the year ended:

September 27, 2008 32,479 September 29, 2007 24,006 The following information was summarized from the fi scal year 2008 annual report of Hewlett-Packard Company:

(in millions)

Cost of sales* for the year ended:

October 31, 2008 $69,342 October 31, 2007 63,435 Inventory:

October 31, 2008 7,879 October 31, 2007 8,033 Net revenue (products) for the year ended:

October 31, 2008 91,697 October 31, 2007 84,229

*Described as “cost of products” by Hewlett-Packard:

Required 1. Calculate the gross profi t ratios for Apple Computer and Hewlett-Packard for each of the two years presented.

2. Calculate the inventory turnover ratios for both companies for the most recent year.

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

AppendixLO1