Evaluating Turnover and Nontraditional Efficiency Ratios Across Industries

The following information is taken from publicly traded retailers. The data come from the balance sheet, income statement, and Item 2 on the companies' Form 10-K filings. Use the information to answer the requirements.

Required

a. Compute the days inventory outstanding (DIO) for each company.

b. Compute the gross profit margin for each company.

c. Compare the DIO and gross profit margin for each of the three combinations of competitors. What do we observe? How a re the two ratios related? d. Compute the following two nontraditional e ffic iency metrics: Revenue per square foot and Revenue per store. What do we observe?

\begin{tabular}{lrrrrr} \hline \$ millions & Revenue & COGS & AverageInventory & RetailSQFootage(000s) & \multicolumn{1}{c}{#ofStores} \\ \hline Autozone...... & $11,221 & $4,902 & $3,913 & 41,066 & 6,202 \\ Costco....... & 141,576 & 121,715 & 10,437 & 110,700 & 762 \\ Home Depot... & 108,203 & 71,043 & 13,337 & 237,700 & 2,287 \\ Lowe's....... & 71,309 & 48,396 & 11,977 & 209,000 & 2,015 \\ O'Reilly. ...... & 9,536 & 4,237 & 3,102 & 38,455 & 5,219 \\ Walmart....... & 511,729 & 374,623 & 44,026 & 1,129,000 & 11,361 \end{tabular}