This information (in millions) is available for the Automotive and Other Operations Divisions of General Motors Corporation
Question:
This information (in millions) is available for the Automotive and Other Operations Divisions of General Motors Corporation for a recent year. General Motors uses the LIFO inventory method.
Beginning inventory ... $ 13,921
Ending inventory ..... 14,939
LIFO reserve ....... 1,423
Current assets ........ 60,135
Current liabilities ...... 70,308
Cost of goods sold .... 166,259
Sales revenue ....... 178,199
Instructions
(a) Calculate the inventory turnover ratio and days in inventory.
(b) Calculate the current ratio based on inventory as reported using LIFO.
(c) Calculate the current ratio after adjusting for the LIFO reserve.
(d) Comment on any difference between parts (b) and (c).
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 =... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Step by Step Answer:
Financial Accounting Tools for business decision making
ISBN: 978-0470534779
6th Edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso