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Calculate the inventory turnover ratio and days in inventory

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Reference no: EM13531032

The following information is available for the automotive division of Ford Motor Company for 2009. The company uses the LIFO inventory method.

(in millions)

2009

Beginning inventory

$6,988

Ending inventory

5,450

LIFO reserve

798

Current assets

40,560

Current liabilities

37,037

Cost of goods sold

100,016

Sales revenue

105,893

Instructions

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

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

(c) After adjusting for the LIFO reserve, calculate the current ratio.

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

Reference no: EM13531032

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