1.

a. Compute the inventory turnover for 2021

b. if the company wants to improve inventory turnover, should it explore ways to increase or decrease its inventory on hand?

c. compute the current ratio for 2021 and 2020. Which year is more liquid?

d. compute the debt to equity for 2021 and 2020. Which year is more solvent?

e. compute return on equity for 2021. Is it a measure most useful in evaluating solvency, profitability, or liquidity?

NVIDIA CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share data) Year Ended January 31, January 26, January 27, 2021 2020 2019 Revenue $ 16,675 $ 10,918 $ 11,716 Cost of Goods Sold 6,279 4,150 4,545 Gross profit 10,396 6,768 7,171 Operating expenses Research and development 3,924 2,829 2,376 Sales, general and administrative 1,940 1,093 991 Total operating expenses 5,864 3,922 3,367 Income from operations 4,532 2,846 3,804 Interest income 57 178 136 Interest expense (184) (52) (58) Other, net 4 (2) 14 Other income (expense), net (123) 124 92 Income before income tax 4,409 2,970 3,896 Income tax expense (benefit) 77 174 (245) Net income $ 4,332 $ 2,796 $ 4,141 NVIDIA CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In millions, except par value) January 31, January 26, 2021 2020 $ 10,896 1 ASSETS Current assets: Cash and cash equivalents Marketable securities Accounts receivable, net Inventories Prepaid expenses and other current assets Total current assets Property and equipment, net Operating lease assets Goodwill Intangible assets, net Deferred income tax assets Other assets Total assets 847 $ 10,714 2,429 1,826 239 16,055 2,149 707 4,193 2,737 806 2,144 28,791 $ 1,657 979 157 13,690 1,674 618 618 49 548 118 17,315 $ $ 687 1,097 1,201 $ 1,725 999 3,925 5,964 634 1,375 11,898 1,784 1,991 561 775 5,111 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable Accrued and other current liabilities Short-term debt Total current liabilities Long-term debt Long-term operating lease liabilities Other long-term liabilities Total liabilities Shareholders' equity: Preferred stock, $0.001 par value; 2 shares authorized; none issued Common stock, $0.001 par value; 2,000 shares authorized; 965 shares issued and 620 outstanding as of January 31, 2021; 955 shares issued and 612 outstanding as of January 26, 2020 Additional paid-in capital Treasury stock, at cost (345 shares in 2021 and 342 shares in 2020) Accumulated other comprehensive income Retained earnings Total shareholders' equity Total liabilities and shareholders' equity 1 8,721 (10,756) 19 18,908 16,893 28,791 $ 1 7,045 (9,814) 1 14,971 12,204 17,315 $ Balance at End of Period NVIDIA CORPORATION AND SUBSIDIARIES SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS Balance at Beginning of Description Period Additions Deductions (In millions) Fiscal year 2021 Allowance for doubtful accounts $ 2 $ 2 $ Fiscal year 2020 Allowance for doubtful accounts $ 2 $ Fiscal year 2019 Allowance for doubtful accounts $ 4 $ $ (2) $ 4 $ 2 ) $ 2