Gehl Company manufactures a full line of construction and agriculture equipment. The following information is available for

Question:

Gehl Company manufactures a full line of construction and agriculture equipment. The following information is available for Gehl for 2006. The company uses the LIFO inventory method.

(in thousands) 2006

Beginning inventory ....... $ 39,121

Ending inventory ........ 48,649

LIFO reserve .......... 29,652

Current assets .......... 291,033

Current liabilities ......... 89,504

Cost of goods sold ....... 381,813

Sales .............. 486,217

Instructions

(a) Calculate the inventory turnover ratio and days in inventory.

(b) Calculate the current ratio based on LIFO inventory.

(d) Comment on any difference between parts (b) and (c).

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,... Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...