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Making Business Decisions: Analyzing Apples Inventory Turnover Ratio You are considering an investment in the common stock of Apple Inc. The following information is from

Making Business Decisions: Analyzing Apples Inventory Turnover Ratio

You are considering an investment in the common stock of Apple Inc. The following information is from the financial statements included in Form 10-K for fiscal years 2015 and 2014 (in millions of dollars):

Cost of sales for the year ended:
September 26, 2015 $140,089
September 27, 2014 112,258
Inventories:
September 26, 2015 2,349
September 27, 2014 2,111
September 29, 2013 1,764

The following information is from the financial statements included in Form 10-K for fiscal years 2015 and 2014 for Hewlett-Packard Company (in millions of dollars):

Cost of sales for the year ended:
October 31, 2015 $53,081
October 31, 2014 56,469
Inventory:
October 31, 2015 6,485
October 31, 2014 6,415
October 31, 2013 6,046

Use 360 days a year.

Required:

1. Calculate the inventory turnover ratios for Apple Inc. and Hewlett-Packard Company for the years ending September 26, 2015 and October 31, 2015, respectively. If required, round your answers to one decimal place.

Apple Inc.: ____times
Hewlett-Packard: _____times

2. Which company appears to be performing better? A. Helett-Packard

B. Apple Inc.

3. Assume Company A has an inventory turnover ratio of 52.8 times and Company B has inventory turnover ratio of 12.6. Based on this information, which of the following statement is correct?

A. Company A is performing better, when it comes to inventory management.

B. Company B is performing better, when it comes to inventory management.

C. Company A sells its product every 6.2 days.

D. Company B sells its products every 4.9 days.

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