Analysis of ADM Archer Daniels Midland Company (ADM) is in the business of procuring, transporting, storing, processing, and merchandising agricultural commodities. The company reported record-high sales and cost of products sold in 1998. Selected financial statement information from ADM’s 1998 annual report is as follows (in thousands of dollars):

Based on ADM’s financial statement information, respond to each of the following questions:

a. What was the percent increase in sales for 1998?

b. What was the dollar increase in inventory during 1998? If inventory had increased the same percent as sales, what would the dollar increase have been?

c. What was the percent increase in inventory during 1998?
Did ADM satisfactorily control its inventory level during 1998? Explain.

d. If a company’s sales volume increases significantly, would you expect its inventory turnover to increase or decrease? Explain. Did ADM’s inventory turnover improve from 1997 to 1998?
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Net sales and other operating income Cost of products sold and other operating costs Gross profit Inventories, January 1 Inventories, December 31 1998 1997 $16,108,630 $13,853,262 (14,727,670) $ 1,380,960 $ 2,094,092 2,562,650 (12,552,718) $ 1,300,544 $ 1,790,636 2,094,092