Performing ratio analysis using real world data
Safeway, Inc., operated 1,743 stores as of December 29, 2007. The following data were taken from the company’s annual report. All dollar amounts are in millions.
|
Fiscal Years Ending |
||
|
December 29, 2007 |
December 30, 2006 |
|
|
Revenue |
$42,286.0 |
$40,185.0 |
|
Cost of Goods Sold |
30,133.1 |
28,604.0 |
|
Net Income |
888.4 |
870.6 |
|
Merchandise Inventory |
2,797.8 |
2,642.5 |
Required
a. Compute Safeway’s inventory turnover ratio for 2007 and 2006.
b. Compute Safeway’s average days to sell inventory for 2007 and 2006.
c. Based on your computations in Requirements a and b, did Safeway’s inventory management get better or worse from 2006 to 2007?