Refer to the consolidated fi nancial statements for Aritzia Inc. reproduced in Appendix A.

Instructions

a. How does Aritzia value its inventory?

b. Which inventory cost formula does Aritzia use?

c. Would using the specifi c identifi cation cost determination method be appropriate for an organization like Aritzia? Explain.

d. For 2018 and 2017, calculate Aritzia’s inventory as a percentage of current assets and its cost of sales as a percentage of total revenue.

Comment on the results.

e. Aritzia’s inventory turnover and days sales in inventory were calculated for 2018 in this chapter in Illustrations 6.20 and 6.21, respectively. Calculate these same two ratios for 2017. The balance in inventory on February 28, 2016, was $77,331. Comment on whether Aritzia’s management of its inventory improved or weakened in 2018.