E$6-25.$ Quantifying the Effect of Inventory Write$-$offs on Ratios

Under Armour reported the following in its $2018$ Form $10-$K$.$ Under Armour's income statement

reported $2018$ cost of goods sold of $$2,852,714$ thousand. Its balance sheet reported inventories of

$$1,019,496$ thousand in $2018$ and $$1,158,548$ thousand in $2017.$

Restructuring Plans As previously announced, our Board of Directors approved restructuring

plans designed to more closely align our financial resources with the critical priorities of our busi$-$

ness and optimize operations. We recognized approximately $$203\mathrm{.}9$ million of pre$-$tax charges

in connection with our restructuring plan. The costs incurred during the year ended December

$31,2018,$ include the following:

a$.$ Explain why Under Armour recorded an inventory write$-$off.

b$.$ What effect did the $2018$ inventory write$-$off have on pretax income during $2018?$

c$.$ Calculate inventory turnover and days inventory outstanding for $2018.$

d$.$ If Under Armour had not written off inventory in $2018,$ what would it have reported for cost of goods

sold in $2018?$ What would have been the inventory balances in $2018$ and $2017?$

$e.$ Use the adjusted cost of goods sold and inventory balances to recalculate inventory turnover and

days inventory outstanding. Did the inventory write$-$off make a significant difference?