Inventory Analysis

Corporal Inc. and Admiral Company compete with each other in the personal computer market. Corporal's primary strategy is to assemble computers to customer orders, rather than for inventory. Thus, for example, Corporal will build and deliver a computer within four days of a customer entering an order on a Web page. Admiral, on the other hand, builds some computers prior to receiving an order, then sells from this inventory once an order is received. Below is selected financial information for both companies from a recent year's financial statements (in millions):

	Corporal Inc.		Admiral Company
Sales	$91,980		$116,100
Cost of goods sold	76,650		109,500
Inventory, beginning of period	2,861		11,060
Inventory, end of period	3,061		13,060

a. Determine for both companies (1) the inventory turnover and (2) the number of days' sales in inventory. Round your calculations and answers to one decimal place. Assume 365 days a year.

	Corporal		Admiral
1. Inventory turnover
2. Number of days' sales in inventory		days		days

b. Corporal has a SelecthigherlowerItem 5 inventory turnover ratio than does Admiral Company. Likewise, Corporal has a SelectlargersmallerItem 6 number of days' sales in inventory.