Deere & Company is a global manufacturer and distributor of agricultural, construction, and forestry equipment. It reported the following information in its 2004 annual report.

(in millions) 2004 2003 Inventories (LIFO) $ 1,999 1,366 Current assets 21,844 Current liabilities 7,889 LIFO reserve 1,002 Cost of goods sold 13,568 Instructions

(a) Compute Deere’s inventory turnover ratio and days in inventory for 2004.

(b) Compute Deere’s current ratio using the 2004 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.
Calculate inventory and cost