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Class+Exercise+from+2-27-09+_2_ - $6,635(2 With the...

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ACCT 2101 CLASS EXERCISE DATE _____________ Topic: Inventory Ratios Name _____________________________ Section _____ Using the Income Statements and Balance Sheets of Home Depot and Lowe’s: (1) Compute the (a) Gross Margin (Profit) Percentage and the (b) Inventory Turnover ratios for the years ended January/February 2007 and 2008. Merchandise Inventories for the years ended in January 2006 were: Home Depot -- $11,041 and Lowe’s --
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Unformatted text preview: $6,635. (2) With the information you now have, what are your conclusions about each company’s inventory situation? (a) Gross Profit Percentage = Gross Profit / Sales Home Depot – 2007: Home Depot – 2008: Lowe’s – 2007: Lowe’s – 2008: (b) Inventory Turnover = Cost of Goods Sold / Average Inventory Home Depot – 2007: Home Depot – 2008: Lowe’s – 2007: Lowe’s – 2008:...
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