evaluate the inventory section of two companies using basic comparative analysis, accounting homework help

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dhvapl16

Business Finance

Description

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: Financial Accounting: Tools for Business Decision Making

Write a 700-1,050-word 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:

  • Compute these 2014 values for each company based on the information in the financial statements:
    • Inventory turnover (Use cost of sales and inventories)
    • Days of inventory
  • Conclusions concerning the management of the inventory can you draw from this data.

Show work on Excel® spreadsheet and submit with analysis.See attached spreadsheet

Amazon.com, Inc. is the world's largest online retailer. It also produces consumer electronics—notably the Kindle e‐book reader and the Kindle Fire tablet computer—and is a major provider of cloud computing services. The following are Amazon's financial statements as presented in the company's 2014 annual report. To access Amazon's complete annual report, including notes to the financial statements, follow these steps:

  1. Go to www.amazon.com.
  2. Select the Investor Relations link at the bottom of the page and then select the 2014 Annual Report under Annual Reports and Proxies.
  3. The Notes to Consolidated Financial Statements begin on page 43.

The following are Wal‐Mart Stores, Inc.'s financial statements as presented in the company's 2015 annual report. To access Wal‐Mart's complete annual report, including notes to the financial statements, follow these steps:

  1. Go to http://corporate.walmart.com.
  2. Select Financial Information and then Annual Reports & Proxies under the Investors tab.
  3. Select the 2015 Annual Report (Wal‐Mart's fiscal year ends January 31).
  4. The Notes to Consolidated Financial Statements begin on page 40.

Unformatted Attachment Preview

Name Section Date Chapter 6 Comparative Analysis Problem 2 Amazon.com, Inc. vs. Wal-Mart Stores, Inc. (a) Amazon.com Inventory turnover: Days in inventory: (b) 377 Wal-Mart
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Explanation & Answer

hello, am done with your task,all points are clearly explained as per your requirements, thanks.

Running head: COMPARATIVE ANALYSIS PROBLEM: AMAZON.COM VS.WAL-MART 1

Fin Comparative Analysis Problem: Amazon.com, Inc. vs. Wal-Mart Stores, Inc.
ACC/290
April 24, 2017

COMPARATIVE ANALYSIS PROBLEM: AMAZON.COM VS.WAL-MART

2

Introduction
Inventory turnover is the ratio that shows how many times in a year in which a firm
translates its inventory into sales. It ensures that a business has enough inventory as compared to
its sales level. A high ratio indicates that a firm is performing better since many customers come
to buy as shown by increased sales implying that much of the stock is sold. A low turnover ratio
indicates that few customers are buying from the firm and thus the sales are few while inventory
levels are still high (Kimmel, Weygandt, & Kieso, 2016).
The receivables turnover of Wal-Mart Corporation is almost the same as that Amazon, but it is
slightly higher. This means that Wal-Mart has more sales possibly because it sells most of its
products on cash basis and can therefore extend credit to customers easily. Amazon seems to be
selling more on credit and therefore most of its debtors haven’t paid and therefore cannot offer
and more credit sales thus the low amount of sales (Kimmel, Weygandt, & Kieso, 2016).
Statements
The inventory turnovers are as shown below:
Inventory turnover =
The cost of Sales
(Beginning Inventory + Ending inventory) / 2
Walmart

C...


Anonymous
I was having a hard time with this subject, and this was a great help.

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