Beach- wood Foods is a grocery store company located in Florida with more than 100 stores in the state. Financial information for fiscal 2009 and 2008 follows.

An excerpt from management discussion and analysis (MD&A) in the fiscal 2009 annual report stated:
Gross margin as a percent of sales was 27.0 percent in fiscal 2009, down from 30.1 percent and 31.2 percent in fiscal 2008 and 2007. The declining gross margin percentages reflect the increase in non-grocery7 items. Non-grocery items, which have been expanded at many of our store locations, have lower margins than grocery items sales.

Required
a. Compute the gross margin percentage for both years.
b. Based on your evaluation of the change in the gross margin percentage and the discussion in the MD&A, comment on how well the company has managed its gross margin.
c. Compute inventory turnover and days’ sales in inventory for both years.
d. Based on your analysis in part c, briefly comment on how well the company has controlled its investment in inventory.

Transcribed Image Text:

Fiscal Fiscal (In Thousands) 2009 2008 Sales $2,500,100 $2,305,150 Cost of merchandise sold 1,800,400 1,610,520 Merchandise inventory 280,420 292,000