M6-1S. Computing and Evaluating Inventory Turnover for Two Companies PriceSmart and Nor dst rom report the following information in their respective January 2016 10-K reports relating to their two most recent fiscal years.

PrlceSmart ($thousands) Nordstrom($ millions)

Cost of Cost of Sales Goods Sold Inventories Sales Goods Sold Inventories 2018 ........ .. $3,053,754 $2,610, 111 $321 ,025 $15,480 $10,155 $1 ,978 2017 ........ .. 2,910,062 2,487,146 310,946 15, 137 9,890 2,027

a. Compute the 2018 inventory turnover for each of these two retailers.

b. Discuss any difference we observe in inventory turnover between these two companies. Does the difference confi rm our expectations given their respective business models? Explain. (Hint: Nordstrom is a higher-end retai ler and PriceSmart operates no-frills, warehouse stores.)

c. Describe ways that a retailer can improve its inventory turnover.