Analyze and compare Amazon.com to TargetAmazon.com, Inc. (AMZN) is one of the largest Internet retailers in the world. Target Corporation (TGT) is one of the largest value-priced general merchandisers operating in the United States. Target sells through nearly 1,800 brick-and-mortarstores and through the Internet. Amazon and Target compete for customers across a wide variety of products, including media, general merchandise, apparel, and consumer electronics. Cost of goods sold and inventory information from a recentannual report are provided for both companies as follows (in millions):Cost of goods soldInventories:Beginning of year16,047 8,597End of year17,147 9,497a. Compute the inventory turnover for both companies. Round your answers to one decimal place.Inventory TurnoverAmazon.comAmazon Target$139,156 $53,299Targetb. Compute the days' sales in inventory for both companies. Assume a 365-day year. If required, round all computations to one decimal place and use in subsequent calculations. Round final answers to one decimal place.Days' Sales in InventorydaysdaysAmazon.comTargetc. Which company has the better inventory efficiency?d. What might explain the difference in inventory efficiency between the two companies?1. The sales team of Amazon is more efficient than the sales team of Target Corporation.2. Target's merchandising strategy requires a more significant investment in inventory than Amazon's.3. The profit margin of Amazon is much higher than that of Target Corporation.4. Amazon is a much larger company than Target and has the resources to handle its funds in an efficient manner.

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Amazon.com, Inc. (AMZN) is one of the largest Internet retailers in the world. Target Corporation (TGT) is one of the largest value-priced general merchandisers operating in the United States. Target sells through nearly 1,800 brick-and-morta stores and through the Internet. Amazon and Target compete for customers across a wide variety of products, including media, general merchandise, apparel, and consumer electronics. Cost of goods sold and inventory information from a recent annual report are provided for both companies as follows (in millions): Cost of goods sold Inventories: Amazon Target $139,156 $53,299 Beginning of year 16,047 8,597 End of year 17,147 9,497 a. Compute the inventory turnover for both companies. Round your answers to one decimal place. Inventory Turnover Amazon.com Target b. Compute the days' sales in inventory for both companies. Assume a 365-day year. If required, round all computations to one decimal place and use in subsequent calculations. Round final answers to one decimal place. Days' Sales in Inventory days days Amazon.com Target c. Which company has the better inventory efficiency? d. What might explain the difference in inventory efficiency between the two companies? 1. The sales team of Amazon is more efficient than the sales team of Target Corporation. 2. Target's merchandising strategy requires a more significant investment in inventory than Amazon's. 3. The profit margin of Amazon is much higher than that of Target Corporation. 4. Amazon is a much larger company than Target and has the resources to handle its funds in an efficient manner.

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter6: Inventories

Section: Chapter Questions

Problem 1MAD: Amazon.com, Inc. (AMZN) is one of the largest Internet retailers in the world. Target Corporation...