Company is showing of Cost of sales of $ 3M in 2016 and $2.9M in 2015.

a. Calculate common-sized 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?

b. Compute inventory turnover for both years and interpret any change. At December 31, 2014, Total inventories, net were $441 million.

c. Company 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? At December 31, 2014, the LIFO reserve was $(85.7) million.

d. Recalculate cost of goods sold (COGS) under the FIFO method.

e. 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?

Consolidated Balance Sheet December 31, (in millions) 2016 2015 Cash and cash equivalents 272.7 359.1 Trade and other receivables, net of 467.4 allowance of $15.2 and $19.2 446.2 Inventories Finished goods 270.5 275.7 59.3 55.0 Work in process 229.4 Raw materials and supplies 239.4 LIFO reserve (73.3 (71.1) 489.0 Total inventories, net 495.9 Other current assets 45.7 44.8 1,281.7 1,339.1 Total current assets 1,184.5 1,161.7 Machinery and equipment Buildings and other 612.2 603.2 Land 44.5 45.3 Total property, plant and equipment 1,841.2 1,810.2 1,237.4 1,266.6 Less accumulated depreciation Net property, plant and equipment 574.6 572.8 926.8 991.5 Goodwill Other intangibles, less accumulated amortization 203.4 206.3 121.6 Sundry 145.2 $3,108.1 $3,254.9 TOTAL ASSETS