La-Z-Boy and McDonald’s The following information is taken from the 2005 financial statements of La-Z-Boy, Inc., maker of recliners and other home furnishings, and the 2005 financial statements of McDonald’s, maker of the Big Mac® and other fast foods.

1. Before you do any computations, forecast which of the two companies will have a lower number of days’ sales in inventory.
2. Compute each company’s number of days’ sales in inventory. Was your forecast in (1)
correct?
3. How can these two very successful companies have number of days’ sales in inventory that are so different?

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Cost of goods sold Beginning inventory Ending inventory... *Amounts in millions. La-Z-Boy McDonald's $1,583.14* $14,136.00* 250.57 147.50 260.56 147.00