The following financial information (in US$ millions) is for two major corporations for the three fiscal years ended December 31 as follows:

Instructions
a. Calculate the inventory turnover, days sales in inventory, and gross profit margin for each company for 2019 and 2018.
b. Comment on your findings.

Taking It Further

Cummins Inc. reports in the notes to the financial statements that approximately 14% of inventory is valued using the last-in, first-out (LIFO) cost method and the remaining inventory is valued using the first-in, first-out (FIFO) cost method. Caterpillar Inc. reports that its inventory is principally valued using the LIFO method. What impact does the use of LIFO have on a comparative analysis of the two companies?

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Cummins Inc. Net sales Cost of sales Profit for the year Inventory Caterpillar Inc. Net sales Cost of sales Profit for the year Inventory 2019 $23,571 17,591 2,260 3,486 $50,755 36,630 6,093 11,266 2018 $23,771 18,034 2,141 3,759 $51,822 36,997 6,147 11,529 2017 $20,428 15,328 999 3,166 $42,676 31,260 754 10,018