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

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University Hussein Technical University (HTU)- USA
Subject Accounting

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:

Company NameMerchandise Concept
Costco Wholesale Corporation (COST)Membership warehouse
Wal-Mart Stores, Inc. (WMT)Discount general merchandise
Nordstrom, Inc. (JWN)Fashion department store

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:

Cost of goods sold$102,901$360,984$9,168
Beginning of year8,90845,1411,733
End of year8,96944,4691,945
  • Determine the inventory turnover ratio for all three companies. Round all calculations to one decimal place.
Inventory Turnover
  • 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.
Number of Days’ Sales in Inventory
  • 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.
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