The inventory turnover ratio (cost of goods sold/average inventory) is a measure of inventory management efficiency and effectiveness. Compute the inventory turnover ratio for Campbell Soup and comment on ways that it might improve the ratio.

e. How much is the LIFO reserve for Campbell Soup? What are the total tax benefits realized by Campbell Soup as of the end of fiscal Year 11 because it chose the LIFO inventory cost flow assumption (assume a 35% tax rate)?

Supplemental Schedule of Sales and Earnings Page A47 (million dollars) Year I1 Year 10 Year 9 Sales Sales Contributions by division Campbell North America Campbell U.S.A. Campbell Canada $3,911.8 $632.7 $3,932.7 $370.8 $3,666.9 $242.3 23.8 13.4 352.0 35.3 384.0 25.6 4,263.8 396.4 3,980.3 266.1 668.0 4,316.7 Campbell Biscuit and Bakery Pepperidge Farm 73.6 548.4 569.0 582.0 57.0 53.6 178.0 International Biscuit 17.6 195.3 8.9 11.7 219.4 788.4 65.3 91.2 726.4 65.9 (117.8) Campbell International 1,222.9 39.4 1,189.8 (168.6) 1,030.3 64.9) (78.0) (71.0) Interdivision $6,205.8 $5,672.1 Total sales $6,204.1 798.6 293.7 213.6 Total operating earnings (16.5) (94.0) Unallocated corporate expenses (31.3) (55.8) Interest, net (90.2) (3.8) (175.0) Foreign currency translation adjustments Taxes on earnings (20.0) (93.4) (265.9) $401.5 $13.1 $4.4 Not earnings $.03 $3.16 $.10 Not earnings por share Overview Campbell had record net earnings in Year 11 of $401.5 million, or $3.16 per share compared to net earnings of $4.4 million, or 3 cents per share, in Year 10. Excluding Year 10's divestiture and restructuring charges, earnings per share increased 34% in Year 11. In Year 11, the Company sold five non-strategic businesses, sold or closed several manufacturing plants, and discontinued certain unprofitable product lines. Net sales of $6.2 billion in Year 11 were even with Year 10. Sales were up 4% excluding businesses that were divested and product lines that were discontinued in Year 11 In Year 10 the Company incurred charges for dvestitures and restructurng of $2.33 per share, reducing net earnings to 3 cents per share. In Year 9 restructuring charges of $2.02 per share reduced earn ngs to 10 cents per share. Exclud ng these charges from both years, earnings per share rose 11% n Year ,0. Sales increased 9%, n Year 10 the company's domest c divisions had strong earnings performances, exclud ng the divest ture and restructuring charges, but the International Divis on's performance was d sapponting principally due to the poor performance of Unted Kngdom frozen food and Italian biscuit operat ons. The ta an bscuit operations were divested in Year 11 The divestiture and restructuring programs were designed to strengthen the Company's core bus nesses and improve ong-term prof tability. The Year 10 divestiture program involved the sale of several low-return or non-strategic bus nesses. The Year 10 restructuring charges provided for the elim nation of underperforming assets and unnecessary facilities and included a write-off of gcodwill. The restructuring charges n Year 9 invoved plant consolidations, work force reductions, and goodwill write-offs Year 11 Compared to Year 10 Supplemental Schedule of Sales and Earnings Page A47 (million dollars) Year I1 Year 10 Year 9 Sales Sales Contributions by division Campbell North America Campbell U.S.A. Campbell Canada $3,911.8 $632.7 $3,932.7 $370.8 $3,666.9 $242.3 23.8 13.4 352.0 35.3 384.0 25.6 4,263.8 396.4 3,980.3 266.1 668.0 4,316.7 Campbell Biscuit and Bakery Pepperidge Farm 73.6 548.4 569.0 582.0 57.0 53.6 178.0 International Biscuit 17.6 195.3 8.9 11.7 219.4 788.4 65.3 91.2 726.4 65.9 (117.8) Campbell International 1,222.9 39.4 1,189.8 (168.6) 1,030.3 64.9) (78.0) (71.0) Interdivision $6,205.8 $5,672.1 Total sales $6,204.1 798.6 293.7 213.6 Total operating earnings (16.5) (94.0) Unallocated corporate expenses (31.3) (55.8) Interest, net (90.2) (3.8) (175.0) Foreign currency translation adjustments Taxes on earnings (20.0) (93.4) (265.9) $401.5 $13.1 $4.4 Not earnings $.03 $3.16 $.10 Not earnings por share Overview Campbell had record net earnings in Year 11 of $401.5 million, or $3.16 per share compared to net earnings of $4.4 million, or 3 cents per share, in Year 10. Excluding Year 10's divestiture and restructuring charges, earnings per share increased 34% in Year 11. In Year 11, the Company sold five non-strategic businesses, sold or closed several manufacturing plants, and discontinued certain unprofitable product lines. Net sales of $6.2 billion in Year 11 were even with Year 10. Sales were up 4% excluding businesses that were divested and product lines that were discontinued in Year 11 In Year 10 the Company incurred charges for dvestitures and restructurng of $2.33 per share, reducing net earnings to 3 cents per share. In Year 9 restructuring charges of $2.02 per share reduced earn ngs to 10 cents per share. Exclud ng these charges from both years, earnings per share rose 11% n Year ,0. Sales increased 9%, n Year 10 the company's domest c divisions had strong earnings performances, exclud ng the divest ture and restructuring charges, but the International Divis on's performance was d sapponting principally due to the poor performance of Unted Kngdom frozen food and Italian biscuit operat ons. The ta an bscuit operations were divested in Year 11 The divestiture and restructuring programs were designed to strengthen the Company's core bus nesses and improve ong-term prof tability. The Year 10 divestiture program involved the sale of several low-return or non-strategic bus nesses. The Year 10 restructuring charges provided for the elim nation of underperforming assets and unnecessary facilities and included a write-off of gcodwill. The restructuring charges n Year 9 invoved plant consolidations, work force reductions, and goodwill write-offs Year 11 Compared to Year 10