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Calculate the common-size amount for inventories for both years and comment on any differences that you note. Given that the company is in the furniture
- Calculate the common-size amount for inventories for both years and comment on any differences that you note. Given that the company is in the furniture manufacturing industry, does this ratio seem appropriate?
- Compute inventory turnover for both years and interpret any change. At December 31, 2014, Total inventories, net were $481.4 million.
- Arm & Shovel uses LIFO for at least some of its inventory method. What would the company have reported as inventory in 2016 and 2015 if the company had used the FIFO method? (LIFO reserve balances: $33.8 million in 2016; $22.6 million in 2015; and $73.0 million in 2014.)
- Recalculate cost of goods sold (COGS) under the FIFO method.
- Recompute the inventory turnover ratios for 2016 and 2015 under the FIFO method. What difference do you notice between the FIFO-based ratios and the LIFO-based ratios?
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