Refer to CVS’s annual report in the Supplement to Chapter 1 and to the following data (in millions) for Walgreens: cost of goods sold, $27,310.4 and

$23,706.2 for 2004 and 2003, respectively; inventories, $4,738.6, $4,202.7 and

$3,645.2 for 2004, 2003, and 2002, respectively. Ending inventories for 2002 for CVS were $4,018.6 million. Calculate inventory turnover and days’ inventory on hand for 2004 and 2003. If you did C 7, refer to your answer there for CVS. Has either company improved its performance over the past two years? What advantage does the superior company’s performance provide to it? Which company appears to make the most efficient use of inventories? Explain your answers.

Ethical Dilemma Case Inventories, Income Determination, and Ethics