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# Inventory Turnover Ratios for Wal-Mart and Target

The following information summarized from the 2007 annual report of Wal-Mart Stores, Inc.

Cost of sales for the year ended January 31: (in millions)

2007 \$264,152
2006 \$237,649

Inventories, January 31:
2007 33,685
2006 31,910

The following information summarized from the 2006 annual report of Target Corporation:

Cost of sales for the year ended: (in millions)

February 3, 2007 \$39,399
January 28, 2006 \$34,927

Inventory

February 3, 2007 6,254
January 28, 2006 5,838

Required
1. Calculate the inventory turnover ratios for Walmart for the year ending January 31, 2007 and Target for the year ending February 3, 2007.

2. Which company appears to be performing better? What other information should you consider to determine how these companies are performing in this regard?

#### Solution Summary

The following information summarized from the 2007 annual report of Wal-Mart Stores, Inc.

Cost of sales for the year ended January 31: (in millions)

2007 \$264,152
2006 \$237,649

Inventories, January 31:
2007 33,685
2006 31,910

The following information summarized from the 2006 annual report of Target Corporation:

Cost of sales for the year ended: (in millions)

February 3, 2007 \$39,399
January 28, 2006 \$34,927

Inventory

February 3, 2007 6,254
January 28, 2006 5,838

Required
1. Calculate the inventory turnover ratios for Walmart for the year ending January 31, 2007 and Target for the year ending February 3, 2007.

2. Which company appears to be performing better? What other information should you consider to determine how these companies are performing in this regard?

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