Discuss what conclusions concerning the management of the inventory can you draw from these data?

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Discuss what conclusions concerning the management of the inventory can you draw from these data?

Question Description

Purpose of Assignment

The purpose of this assignment is to evaluate the inventory section of two companies using basic comparative analysis, and to interpret the data to gain insight about the company’s inventory management.

Assignment Steps

Resources: Appendices D and E located in Financial Accounting: Tools for Business Decision Making

Note: While the data are not from the same year, inferences can be drawn regarding inventory management of the two companies.

Use and complete the Excel template in Student Materials to do a comparative analysis using the financial statements of Amazon.com, Inc. presented in Appendix D, and the financial statements for Wal-Mart Stores, Inc., presented in Appendix E, including the following:

(a) Compute the 2014 values for Amazon.com and the 2015 values for Wal-Mart based on the information in the financial statements:

  • Inventory turnover (Use cost of sales and inventories)
  • Days of inventory

(b) Discuss what conclusions concerning the management of the inventory can you draw from these data?