Consider the following information from financial statements, with dollar amounts in millions:
|
Corporation |
Inventory |
Cost of Goods Sold |
Primary Product |
|
A |
$816 |
$2,761 |
Drugs and health care |
|
B |
2,141 |
3,975 |
Tobacco products |
|
C |
1,147 |
17,932 |
Oil and gasoline |
|
D |
707 |
3,915 |
Food, soup |
|
E |
1,595 |
6,506 |
Computers |
|
F |
494 |
3,727 |
Food, cereal |
Source: Standard & Poors Compustat PC Plus CD- Rom
a. Calculate the inventory turnover for each firm.
b. Calculate the number of days of inventory for each firm.
c. Why might the inventory turnovers and number of days of inventory differ among these firms?