Analyze and Compare Costco, Wal-Mart, and Nordstrom: Accounting Homework, HTU, US

Assignment Brief:

Analyze and compare Costco, Wal-Mart, and Nordstrom

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

For a recent year, the following cost of goods sold and beginning and ending inventories are provided from corporate annual reports (in millions) for these three companies:

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

• Determine the number of days’ sales in inventory for all three companies. Assume a 365-day year. If required, round all computations to one decimal place and use it in subsequent calculations. Round final answers to one decimal place.

• Based on the results, which of the following statements is INCORRECT with regard to each company’s merchandising concept?

1. Costco holds only mass-appeal items that are sold quickly off the shelf.
2. Wal-Mart has attractive pricing, but the inventory moves more slowly than would be the case at a club warehouse.
3. Nordstrom’s inventory moves slowly but at a higher margin.
4. Wal-Mart’s inventory moves very quickly at higher margins.