Discussion： Merchandising Operations and Inventory
“Walmart” ONE PAGE DOUBLE SPACED
Using the Annual Report of your selected company answer the following questions in the Discussion:
- What is the value of the company’s inventory at year end?
- What was the amount of cost of goods sold for the year?
- What income statement format does the company use? Explain.
- Compute the company’s gross profit percentage for the year end.
- Did the gross profit percentage improve, worsen, or hold steady?
- How does the company’s gross profit percentage compare to the industry?
- What are the company’s inventory turnover and days sales in inventory for the year end? Is there anything interesting to note about these ratios?
If your company is a service company, please find a different company that would have inventory, perhaps a supplier to your selected company. Then answer the questions shown above. Be sure to state what company and supply a link to the information. You may use a service such as Yahoo Finance to help research industry averages. The notes to the financial statements will also be of use in answering the discussion questions. For many of the ratios in the discussion, you will need 2-3 years’ worth of financial data.
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Walmart’s Inventory Accouting
Walmart Inventory Value
The Walmart balance sheets show that its inventory was at $43,046 by the end of the 2017 financial year (Walmart, 2017). There are several implications associated with the inventory value. First, the inventory value suggests the amount of product in the inventory and thus the extent to which the company is in a hurry to release its products, which influences the pricing.
Walmart Cost of Goods Sold
According to Walmart, (2017), the company uses cost of sales as an alternative concept for the cost of goods sold. The cost of sales includes the cost of manufacturing, storage and transportation. The report suggests a cost of sales value of $361,256.
(600 words)