The January 28, 2017 (fiscal year 2016) financial statements ofCaleres, Inc. reported the following information (inthousands):
Caleres, Inc. | 2016 | 2015 |
Cost of sales | $1,517,397 | $1,529,527 |
Inventories, net | Ă‚Â Ă‚Â Ă‚Â 585,764 | Ă‚Â Ă‚Â Ă‚Â 546,745 |
LIFO reserve | Ă‚Â Ă‚Â Ă‚Â Ă‚Â Ă‚Â Ă‚Â Ă‚Â 4,345 | Ă‚Â Ă‚Â Ă‚Â Ă‚Â Ă‚Â Ă‚Â Ă‚Â 4,094 |
The footnotes to the 2016 financial statements of SkechersU.S.A., Inc. reported that the company uses the FIFOmethod of accounting for inventories. Financial statementsreported the following (in thousands):
Skechers U.S.A., Inc. | 2016 | 2015 |
Cost of sales | $1,928,715 | $1,723,315 |
Inventories, net | 700,515 | 620,247 |
a.      Calculate the twocompanies’ days-inventory-outstanding ratios for 2016 to allow fora comparison.
b. Which company is more efficient with its inventory?
c. Suggest two ways that Calares might improve thedays-inventory-outstanding.
