This information is available for the Automotive and Other Operations Divisions of General Motors Corporation for 2006.

Question:

This information is available for the Automotive and Other Operations Divisions of General Motors Corporation for 2006. General Motors uses the LIFO inventory method.

(in millions) 2006

Beginning inventory .... $ 13,862

Ending inventory ...... 13,921

LIFO reserve ........ 1,508

Current assets ........ 64,131

Current liabilities ..... 67,822

Cost of goods sold ..... 164,682

Sales ........... 172,927

Instruction

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

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

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

Inventory Turnover Ratio
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