Mainly as a result of declines in prices for crude oil, natural gas and petroleum products and a significant decline in its market capitalization at the end of the first quarter of 2018, the Corporation recognized before-tax goodwill impairment charges of $611 million in Upstream, Downstream, and Chemical reporting units. Fair value of the goodwill reporting units primarily reflected market-based estimates of historical EBITDA multiples at the end of the first quarter. Charges related to goodwill impairments in 2018 are included in "Depreciation and depletion" on the Consolidated Statement of Income.

CONSOLIDATED STATEMENT OF INCOME The information in the Notes to Consolidated Financial Statements is an integral part of these statements. Attached please find Income Statement, Balance Sheet, and footnote 3 on LIFO inventories from ExxonMobil's 2019 Annual Report. Answer the following questions for 2019. 1. Calculate the firm's inventory turnover ratio (COGS/average of beginning and ending inventory). Use "crude oil and product purchases" for COGS, and "Crude oil, products, and merchandise" for inventory. 2. Recalculate the ratio in \#1 assuming that the firm used FIFO. 3. Recalculate the ratio in \#1 assuming that the firm used LIFO but did not liquidate any inventory (i.e., kept its beginning balance intact). CONSOLIDATED BALANCE SHEET Note Dec. 31 2018 Assets Current assets Cash and cash equivalents Notes and accounts receivable, less estimated doubtful amounts Inventories Crude oil, products and merchandise Materials and supplies Other current assets Total current assets Investments, advances and long-term receivables Property, plant and equipment, at cost, less accumulated depreciation and depletion Other assets, including intangibles, net Total assets Liabilities Current liabilities Notes and loans payable Accounts payable and accrued liabilitics Income taxes payable Total current liabilities Long-term debt Postretirement benefits reserves Deferred income tax liabilities Long-term obligations to equity companies Other long-term obligations Total liabilities \begin{tabular}{rr} 3,089 & 3,042 \\ 26,966 & 24,701 \\ 14,010 & 14,803 \\ 4,518 & 4,155 \\ 1,469 & 1,272 \\ \hline 50,052 & 47,973 \\ 43,164 & 40,790 \\ & \\ 253,018 & 247,101 \\ 16,363 & 10,332 \\ \hline 362,597 & 346,196 \\ \hline \end{tabular} Commitments and contingencies 16 Equity Common stock without par value ( 9,000 million shares authorized, 8,019 million shares issued) Earnings reinvested Accumulated other comprehensive income \begin{tabular}{rrr} 6 & 20,578 & 17,258 \\ 6 & 41,831 & 37,268 \\ & 1,580 & 2,612 \\ \hline & 63,989 & 57,138 \\ 14 & 26,342 & 20,538 \\ 17 & 22,304 & 20,272 \\ 19 & 25,620 & 27,244 \\ & 3,988 & 4,382 \\ & 21,416 & 18,094 \\ \hline & 163,659 & 147,668 \\ \hline \end{tabular} Common stock held in treasury (3,785 million shares in 2019 and 3,782 million shares in 2018) ExxonMobil share of equity Noncontrolling interests Total equity Total liabilities and equity \begin{tabular}{rr} (225,835) & (225,553) \\ \hline 191,650 & 191,794 \\ 7,288 & 6,734 \\ \hline 198,938 & 198,528 \\ \hline 362,597 & 346,196 \\ \hline \end{tabular} The information in the Notes to Consolidated Financial Statements is an integral part of these statements. 2. Accounting Changes Effective January 1, 2019, the Corporation adopted the Financial Accounting Standards Board's Standard, Leases (Topic 842), as amended. The standard requires all leases to be recorded on the balance sheet as a right of use asset and a lease liability. The Corporation used a transition method that applies the new lease standard at January 1, 2019. The Corporation applied a policy election to exclude short-term leases from balance sheet recognition and also elected certain practical expedients at adoption. As permitted, the Corporation did not reassess whether existing contracts are or contain leases, the lease classification for any existing leases, initial direct costs for any existing lease and whether existing land easements and rights of way, which were not previously accounted for as leases, are or contain a lease. At adoption on January 1, 2019, an operating lease liability of $3.3 billion was recorded and the operating lease right of use asset was $4.3 billion, including $1.0 billion of previously recorded prepaid leases. There was no cumulative earnings effect adjustment. Effective January 1, 2020, the Corporation adopted the Financial Accounting Standards Board's update, Financial Instruments Credit Losses (Topic 326), as amended. The standard requires a valuation allowance for credit losses be recognized for certain financial assets that reflects the current expected credit loss over the asset's contractual life. The valuation allowance considers the risk of loss, even if remote, and considers past events, current conditions and expectations of the future. The standard is not expected to have a material impact on the Corporation's financial statements. 3. Miscellaneous Financial Information Research and development expenses totaled \$1,214 million in 2019, \$1,116 million in 2018, and \$1,063 million in 2017. Net income included before-tax aggregate foreign exchange transaction losses of $104 million and $138 million in 2019 and 2018 , respectively, and a gain of $6 million in 2017 . In 2019,2018 , and 2017 , net income included gains of $523 million and $107 million, and a loss of $10 million, respectively, attributable to the combined effects of LIFO inventory accumulations and drawdowns. The aggregate replacement cost of inventories was estimated to exceed their LIFO carrying values by $9.7 billion and $8.2 billion at December 31,2019 , and 2018 , respectively. Crude oil, products and merchandise as of year-end 2019 and 2018 consist of the following: CONSOLIDATED STATEMENT OF INCOME The information in the Notes to Consolidated Financial Statements is an integral part of these statements. Attached please find Income Statement, Balance Sheet, and footnote 3 on LIFO inventories from ExxonMobil's 2019 Annual Report. Answer the following questions for 2019. 1. Calculate the firm's inventory turnover ratio (COGS/average of beginning and ending inventory). Use "crude oil and product purchases" for COGS, and "Crude oil, products, and merchandise" for inventory. 2. Recalculate the ratio in \#1 assuming that the firm used FIFO. 3. Recalculate the ratio in \#1 assuming that the firm used LIFO but did not liquidate any inventory (i.e., kept its beginning balance intact). CONSOLIDATED BALANCE SHEET Note Dec. 31 2018 Assets Current assets Cash and cash equivalents Notes and accounts receivable, less estimated doubtful amounts Inventories Crude oil, products and merchandise Materials and supplies Other current assets Total current assets Investments, advances and long-term receivables Property, plant and equipment, at cost, less accumulated depreciation and depletion Other assets, including intangibles, net Total assets Liabilities Current liabilities Notes and loans payable Accounts payable and accrued liabilitics Income taxes payable Total current liabilities Long-term debt Postretirement benefits reserves Deferred income tax liabilities Long-term obligations to equity companies Other long-term obligations Total liabilities \begin{tabular}{rr} 3,089 & 3,042 \\ 26,966 & 24,701 \\ 14,010 & 14,803 \\ 4,518 & 4,155 \\ 1,469 & 1,272 \\ \hline 50,052 & 47,973 \\ 43,164 & 40,790 \\ & \\ 253,018 & 247,101 \\ 16,363 & 10,332 \\ \hline 362,597 & 346,196 \\ \hline \end{tabular} Commitments and contingencies 16 Equity Common stock without par value ( 9,000 million shares authorized, 8,019 million shares issued) Earnings reinvested Accumulated other comprehensive income \begin{tabular}{rrr} 6 & 20,578 & 17,258 \\ 6 & 41,831 & 37,268 \\ & 1,580 & 2,612 \\ \hline & 63,989 & 57,138 \\ 14 & 26,342 & 20,538 \\ 17 & 22,304 & 20,272 \\ 19 & 25,620 & 27,244 \\ & 3,988 & 4,382 \\ & 21,416 & 18,094 \\ \hline & 163,659 & 147,668 \\ \hline \end{tabular} Common stock held in treasury (3,785 million shares in 2019 and 3,782 million shares in 2018) ExxonMobil share of equity Noncontrolling interests Total equity Total liabilities and equity \begin{tabular}{rr} (225,835) & (225,553) \\ \hline 191,650 & 191,794 \\ 7,288 & 6,734 \\ \hline 198,938 & 198,528 \\ \hline 362,597 & 346,196 \\ \hline \end{tabular} The information in the Notes to Consolidated Financial Statements is an integral part of these statements. 2. Accounting Changes Effective January 1, 2019, the Corporation adopted the Financial Accounting Standards Board's Standard, Leases (Topic 842), as amended. The standard requires all leases to be recorded on the balance sheet as a right of use asset and a lease liability. The Corporation used a transition method that applies the new lease standard at January 1, 2019. The Corporation applied a policy election to exclude short-term leases from balance sheet recognition and also elected certain practical expedients at adoption. As permitted, the Corporation did not reassess whether existing contracts are or contain leases, the lease classification for any existing leases, initial direct costs for any existing lease and whether existing land easements and rights of way, which were not previously accounted for as leases, are or contain a lease. At adoption on January 1, 2019, an operating lease liability of $3.3 billion was recorded and the operating lease right of use asset was $4.3 billion, including $1.0 billion of previously recorded prepaid leases. There was no cumulative earnings effect adjustment. Effective January 1, 2020, the Corporation adopted the Financial Accounting Standards Board's update, Financial Instruments Credit Losses (Topic 326), as amended. The standard requires a valuation allowance for credit losses be recognized for certain financial assets that reflects the current expected credit loss over the asset's contractual life. The valuation allowance considers the risk of loss, even if remote, and considers past events, current conditions and expectations of the future. The standard is not expected to have a material impact on the Corporation's financial statements. 3. Miscellaneous Financial Information Research and development expenses totaled \$1,214 million in 2019, \$1,116 million in 2018, and \$1,063 million in 2017. Net income included before-tax aggregate foreign exchange transaction losses of $104 million and $138 million in 2019 and 2018 , respectively, and a gain of $6 million in 2017 . In 2019,2018 , and 2017 , net income included gains of $523 million and $107 million, and a loss of $10 million, respectively, attributable to the combined effects of LIFO inventory accumulations and drawdowns. The aggregate replacement cost of inventories was estimated to exceed their LIFO carrying values by $9.7 billion and $8.2 billion at December 31,2019 , and 2018 , respectively. Crude oil, products and merchandise as of year-end 2019 and 2018 consist of the following