The Kroger Company reported the following data in its annual report (in millions). January 28, 2017 January 30, 2016 January 31, 2015 Net sales $115,337 $109,830 $108,465 Cost of sales (using LIFO) 89,502 85,496 85,512 Year-end inventories using FIFO 7,852 7,440 6,933 Year-end inventories using LIFO 6,561 6,168 8,178 Instructions a. Compute Kroger's inventory turnovers for fiscal years ending January 28, 2017, and January 30, 2016, using: 1. Cost of sales and LIFO inventory. 2. Cost of sales and FIFO inventory. b. Some firms calculate inventory turnover using sales rather than cost of goods sold in the numerator. Calculate Kroger's fiscal years ending January 28, 2017, and January 30, 2016, turnover, using: 1. Sales and LIFO inventory. 2. Sales and FIFO inventory. c. State which method you would choose to evaluate Kroger's performance. Justify your choice.
The Kroger Company reported the following data in its annual report (in millions). January 28, 2017 January 30, 2016 January 31, 2015 Net sales $115,337 $109,830 $108,465 Cost of sales (using LIFO) 89,502 85,496 85,512 Year-end inventories using FIFO 7,852 7,440 6,933 Year-end inventories using LIFO 6,561 6,168 8,178 Instructions a. Compute Kroger's inventory turnovers for fiscal years ending January 28, 2017, and January 30, 2016, using: 1. Cost of sales and LIFO inventory. 2. Cost of sales and FIFO inventory. b. Some firms calculate inventory turnover using sales rather than cost of goods sold in the numerator. Calculate Kroger's fiscal years ending January 28, 2017, and January 30, 2016, turnover, using: 1. Sales and LIFO inventory. 2. Sales and FIFO inventory. c. State which method you would choose to evaluate Kroger's performance. Justify your choice.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The Kroger Company reported the following data in its annual report (in millions).
| January 28, 2017 |
January 30, 2016 |
January 31, 2015 |
|
| Net sales | $115,337 | $109,830 | $108,465 |
| Cost of sales (using LIFO) | 89,502 | 85,496 | 85,512 |
| Year-end inventories using FIFO | 7,852 | 7,440 | 6,933 |
| Year-end inventories using LIFO | 6,561 | 6,168 | 8,178 |
Instructions
a. Compute Kroger's inventory turnovers for fiscal years ending January 28, 2017, and January 30, 2016, using:
1. Cost of sales and LIFO inventory.
2. Cost of sales and FIFO inventory.
b. Some firms calculate inventory turnover using sales rather than cost of goods sold in the numerator. Calculate Kroger's fiscal years ending January 28, 2017, and January 30, 2016, turnover, using:
1. Sales and LIFO inventory.
2. Sales and FIFO inventory.
c. State which method you would choose to evaluate Kroger's performance. Justify your choice.
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