The general merchandise retail industry has a number of segments represented by the following companies:

Company Name

Merchandise Concept

Costco Wholesale Corporation

Membership warehouse

Wal Mart

Discount general merchandise

JCPenney

Department store

For a recent year, the following cost of merchandise sold and beginning and ending inventories have been provided from corporate annual reports for these three companies:

 

Costco

Wal Mart

JCPenney

Cost of merchandise sold

$42,092

$219,793

$11,285

Merchandise inventory, beginning

3,339

26,612

3,156

Merchandise inventory, ending

3,644

29,447

3,169

a. Determine the inventory turnover ratio for all three companies. Round to one decimal place.

b. Determine the number of days’ sales in inventory for all three companies. Round to one decimal place.

c. Interpret these results based upon each company’s merchandise concept.