Deere & Company is a global manufacturer and distributor of agricultural, construction, and forestry equipment. It reported

Question:

Deere & Company is a global manufacturer and distributor of agricultural, construction, and forestry equipment. It reported the following information in its 2006 annual report.

Instructions
(a) Compute Deere's inventory turnover ratio and days in inventory for 2006.
(b) Compute Deere's current ratio using the 2006 data as presented, and then again after adjusting for the LIFO reserve.
(c) Comment on how ignoring the LIFO reserve might affect your evaluation of Deere'sliquidity.

Inventory Turnover Ratio
Inventory Turnover RatioThe inventory turnover ratio is a ratio of cost of goods sold to its average inventory. It is measured in times with respect to the cost of goods sold in a year normally. Inventory Turnover Ratio FormulaWhere,...