Deere & Company is a global manufacturer and distributor of agricultural, construction, and forestry equipment. Suppose it reported the following information in its 2017 annual report.

Instructions

(a) Compute Deere’s inventory turnover and days in inventory for 2017. (Round inventory turnover to 2 decimal places.)

(b) Compute Deere’s current ratio using the 2017 data as presented, and then again after adjusting for the LIFO reserve.

(c) Comment on how ignoring the LIFO reserve might affect your evaluation of Deere’s liquidity.

Transcribed Image Text:

(in millions) 2017 2016 Inventories (LIFO) $ 2,397 $3,042 Current assets 30,857 Current liabilities 12,753 LIFO reserve 1,367 Cost of goods sold 16,255