The Kroger Company reported the following data in its annual report (in millions).

Instructions

a. Compute Kroger?s inventory turnovers for fiscal years ending January 28, 2017, and January 30, 2016, using:

1. Cost of sales and LIFO inventory.

2. Cost of sales and FIFO inventory.

b. Some firms calculate inventory turnover using sales rather than cost of goods sold in the numerator. Calculate Kroger?s fiscal years ending January 28, 2017, and January 30, 2016, turnover, using:

1. Sales and LIFO inventory.

2. Sales and FIFO inventory.

c. State which method you would choose to evaluate Kroger?s performance. Justify your choice.

Transcribed Image Text:

January 30, 2016 January 28, 2017 January 31, 2015 Net sales $115,337 89,502 7,852 6,561 $109,830 85,496 $108,465 85,512 6,933 8,178 Cost of sales (using LIFO) Year-end inventories using FIFO Year-end inventories using LIFO 7,440 6,168