Reference no: EM13257936

Dell Inc. and Hewlett-Packard Company (HP) compete with eachother in the personal computer market. Dell's strategyis to assemble computers to customer orders, rather than forinventory. Thud, for example, Dell will build and deliver acomputer within four days of a customer entering an order on a webpage. Hewlett-Packard, on the other hand, builds somecomputers prior to receiving an order, then sells from thisinventory once an order is received. Below is selectedfinancial information for both companies from a recent year'sfinancial statements (in millions):

                                                                       DellInc.                     Hewlet-Packard

                                                                                                           Company

Sales                                                               55,908                        86,696

Cost of goodssold                                         45,620                        66,440

Inventory, beginning ofperiod                      459                             7,071

Inventory, end ofperiod                                576                             6,877

• Determine for both companies (1) the inventory turnoverand (2) the number of days' sales in inventory. Round toone decimal place.
• Interpret the inventory ratios by consideringDell's and Hewlett-Packard's operatingstrategies.