91影视

1) Cost of sale and LIFO inventory

$\begin{array}{c}\mathbf{Average}\mathbf{}\mathbf{Inventory}\mathbf{\left(}\mathbf{2015}\mathbf{\right)}\mathbf{=}\frac{\mathbf{Ending}\mathbf{}\mathbf{Inventory}\mathbf{\left(}\mathbf{LIFO}\mathbf{2015}\mathbf{\right)}\mathbf{+}\mathbf{Ending}\mathbf{}\mathbf{Inventory}\mathbf{\left(}\mathbf{LIFO}\mathbf{2014}\mathbf{\right)}}{\mathbf{2}}\\ \mathbf{=}\frac{\mathbf{\$}\mathbf{5688}\mathbf{+}\mathbf{\$}\mathbf{5651}}{\mathbf{2}}\\ \mathbf{=}\frac{\mathbf{\$}\mathbf{11339}}{\mathbf{2}}\\ \mathbf{=}\mathbf{\$}\mathbf{5}\mathbf{,}\mathbf{669}\mathbf{.}\mathbf{5}\end{array}$

role="math" localid="1648815664029" $\begin{array}{c}\mathbf{Inventory}\mathbf{}\mathbf{Turnover}\mathbf{}\mathbf{ratio}\mathbf{\left(}\mathbf{2015}\mathbf{\right)}\mathbf{=}\frac{\mathbf{Cost}\mathbf{}\mathbf{of}\mathbf{}\mathbf{sale}\mathbf{\left(}\mathbf{2015}\mathbf{\right)}}{\mathbf{Average}\mathbf{}\mathbf{Inventory}\mathbf{}\mathbf{2015}\mathbf{\left(}\mathbf{LIFO}\mathbf{\right)}}\\ \mathbf{=}\frac{\mathbf{\$}\mathbf{85}\mathbf{,}\mathbf{512}}{\mathbf{\$}\mathbf{5}\mathbf{,}\mathbf{669}\mathbf{.}\mathbf{5}}\\ \mathbf{=}\mathbf{15}\mathbf{.}\mathbf{08}\end{array}$

role="math" localid="1648815896567" $\begin{array}{c}\mathbf{Average}\mathbf{}\mathbf{Inventory}\mathbf{}\mathbf{\left(}\mathbf{2014}\mathbf{\right)}\mathbf{=}\frac{\mathbf{Ending}\mathbf{}\mathbf{Inventory}\mathbf{\left(}\mathbf{LIFO}\mathbf{2014}\mathbf{\right)}\mathbf{+}\mathbf{Ending}\mathbf{}\mathbf{Inventory}\mathbf{\left(}\mathbf{LIFO}\mathbf{2013}\mathbf{\right)}}{\mathbf{2}}\\ \mathbf{=}\frac{\mathbf{\$}\mathbf{5}\mathbf{,}\mathbf{651}\mathbf{+}\mathbf{\$}\mathbf{5}\mathbf{,}\mathbf{146}}{\mathbf{2}}\\ \mathbf{=}\frac{\mathbf{\$}\mathbf{10}\mathbf{,}\mathbf{797}}{\mathbf{2}}\\ \mathbf{=}\mathbf{\$}\mathbf{5}\mathbf{,}\mathbf{398}\mathbf{.}\mathbf{5}\end{array}$

$\begin{array}{c}\mathbf{Inventory}\mathbf{}\mathbf{Turnover}\mathbf{}\mathbf{ratio}\mathbf{\left(}\mathbf{2014}\mathbf{\right)}\mathbf{=}\frac{\mathbf{Cost}\mathbf{}\mathbf{of}\mathbf{}\mathbf{sale}\mathbf{\left(}\mathbf{2014}\mathbf{\right)}}{\mathbf{Average}\mathbf{}\mathbf{Inventory}\mathbf{}\mathbf{2014}\mathbf{\left(}\mathbf{LIFO}\mathbf{\right)}}\\ \mathbf{=}\frac{\mathbf{\$}\mathbf{78}\mathbf{,}\mathbf{138}}{\mathbf{\$}\mathbf{5}\mathbf{,}\mathbf{398}\mathbf{.}\mathbf{5}}\\ \mathbf{=}\mathbf{14}\mathbf{.}\mathbf{47}\end{array}$

2) Cost of sale and FIFO inventory

$\begin{array}{c}\mathbf{Average}\mathbf{}\mathbf{Inventory}\mathbf{\left(}\mathbf{2015}\mathbf{\right)}\mathbf{=}\frac{\mathbf{Ending}\mathbf{}\mathbf{Inventory}\mathbf{\left(}\mathbf{FIFO}\mathbf{2015}\mathbf{\right)}\mathbf{+}\mathbf{Ending}\mathbf{}\mathbf{Inventory}\mathbf{\left(}\mathbf{FIFO}\mathbf{2014}\mathbf{\right)}}{\mathbf{2}}\\ \mathbf{=}\frac{\mathbf{\$}\mathbf{6}\mathbf{,}\mathbf{933}\mathbf{+}\mathbf{\$}\mathbf{6}\mathbf{,}\mathbf{801}}{\mathbf{2}}\\ \mathbf{=}\frac{\mathbf{\$}\mathbf{13}\mathbf{,}\mathbf{734}}{\mathbf{2}}\\ \mathbf{=}\mathbf{\$}\mathbf{6}\mathbf{,}\mathbf{867}\end{array}$

$\begin{array}{c}\mathbf{InventoryTurnoverratio}\mathbf{\left(}\mathbf{2015}\mathbf{\right)}\mathbf{=}\frac{\mathbf{Costofsale}\mathbf{\left(}\mathbf{2015}\mathbf{\right)}}{\mathbf{AverageInventory}\mathbf{2015}\mathbf{\left(}\mathbf{FIFO}\mathbf{\right)}}\\ \mathbf{=}\frac{\mathbf{\$}\mathbf{85}\mathbf{,}\mathbf{512}}{\mathbf{\$}\mathbf{6}\mathbf{,}\mathbf{867}}\\ \mathbf{=}\mathbf{12}\mathbf{.}\mathbf{45}\end{array}$

$\begin{array}{c}\mathbf{Average}\mathbf{}\mathbf{Inventory}\mathbf{\left(}\mathbf{2014}\mathbf{\right)}\mathbf{=}\frac{\mathbf{Ending}\mathbf{}\mathbf{Inventory}\mathbf{\left(}\mathbf{FIFO}\mathbf{2014}\mathbf{\right)}\mathbf{+}\mathbf{Ending}\mathbf{}\mathbf{Inventory}\mathbf{\left(}\mathbf{FIFO}\mathbf{2013}\mathbf{\right)}}{\mathbf{2}}\\ \mathbf{=}\frac{\mathbf{\$}\mathbf{6}\mathbf{,}\mathbf{801}\mathbf{+}\mathbf{\$}\mathbf{6}\mathbf{,}\mathbf{244}}{\mathbf{2}}\\ \mathbf{=}\frac{\mathbf{\$}\mathbf{13}\mathbf{,}\mathbf{045}}{\mathbf{2}}\\ \mathbf{=}\mathbf{\$}\mathbf{6}\mathbf{,}\mathbf{522}\mathbf{.}\mathbf{5}\end{array}$

$\begin{array}{c}\mathbf{InventoryTurnover}\mathbf{}\mathbf{ratio}\mathbf{\left(}\mathbf{2014}\mathbf{\right)}\mathbf{=}\frac{\mathbf{Cost}\mathbf{}\mathbf{of}\mathbf{}\mathbf{sale}\mathbf{\left(}\mathbf{2014}\mathbf{\right)}}{\mathbf{Average}\mathbf{}\mathbf{Inventory}\mathbf{}\mathbf{2014}\mathbf{\left(}\mathbf{LIFO}\mathbf{\right)}}\\ \mathbf{=}\frac{\mathbf{\$}\mathbf{78}\mathbf{,}\mathbf{138}}{\mathbf{\$}\mathbf{6}\mathbf{,}\mathbf{522}\mathbf{.}\mathbf{5}}\\ \mathbf{=}\mathbf{11}\mathbf{.}\mathbf{98}\end{array}$

1) Sale and LIFO inventory

$\begin{array}{c}\mathbf{Average}\mathbf{}\mathbf{Inventory}\mathbf{\left(}\mathbf{2015}\mathbf{\right)}\mathbf{=}\frac{\mathbf{Ending}\mathbf{}\mathbf{Inventory}\mathbf{\left(}\mathbf{LIFO}\mathbf{2015}\mathbf{\right)}\mathbf{+}\mathbf{Ending}\mathbf{}\mathbf{Inventory}\mathbf{\left(}\mathbf{LIFO}\mathbf{2014}\mathbf{\right)}}{\mathbf{2}}\\ \mathbf{=}\frac{\mathbf{\$}\mathbf{5688}\mathbf{+}\mathbf{\$}\mathbf{5651}}{\mathbf{2}}\\ \mathbf{=}\frac{\mathbf{\$}\mathbf{11339}}{\mathbf{2}}\\ \mathbf{=}\mathbf{\$}\mathbf{5}\mathbf{,}\mathbf{669}\mathbf{.}\mathbf{5}\end{array}$

role="math" localid="1648817877902" $\begin{array}{c}\mathbf{InventoryTurnover}\mathbf{}\mathbf{ratio}\mathbf{\left(}\mathbf{2015}\mathbf{\right)}\mathbf{=}\frac{\mathbf{Sale}\mathbf{\left(}\mathbf{2015}\mathbf{\right)}}{\mathbf{Average}\mathbf{}\mathbf{Inventory}\mathbf{}\mathbf{2015}\mathbf{\left(}\mathbf{LIFO}\mathbf{\right)}}\\ \mathbf{=}\frac{\mathbf{\$}\mathbf{108}\mathbf{,}\mathbf{465}}{\mathbf{\$}\mathbf{5}\mathbf{,}\mathbf{669}\mathbf{.}\mathbf{5}}\\ \mathbf{=}\mathbf{19}\mathbf{.}\mathbf{13}\end{array}$

role="math" localid="1648817850209" $\begin{array}{c}\mathbf{Average}\mathbf{}\mathbf{Inventory}\mathbf{\left(}\mathbf{2014}\mathbf{\right)}\mathbf{=}\frac{\mathbf{Ending}\mathbf{}\mathbf{Inventory}\mathbf{\left(}\mathbf{LIFO}\mathbf{2014}\mathbf{\right)}\mathbf{+}\mathbf{Ending}\mathbf{}\mathbf{Inventory}\mathbf{\left(}\mathbf{LIFO}\mathbf{2013}\mathbf{\right)}}{\mathbf{2}}\\ \mathbf{=}\frac{\mathbf{\$}\mathbf{5}\mathbf{,}\mathbf{651}\mathbf{+}\mathbf{\$}\mathbf{5}\mathbf{,}\mathbf{146}}{\mathbf{2}}\\ \mathbf{=}\frac{\mathbf{\$}\mathbf{10}\mathbf{,}\mathbf{797}}{\mathbf{2}}\\ \mathbf{=}\mathbf{\$}\mathbf{5}\mathbf{,}\mathbf{398}\mathbf{.}\mathbf{5}\end{array}$

$\begin{array}{c}\mathbf{Inventory}\mathbf{}\mathbf{Turnover}\mathbf{}\mathbf{ratio}\mathbf{\left(}\mathbf{2014}\mathbf{\right)}\mathbf{=}\frac{\mathbf{Sale}\mathbf{\left(}\mathbf{2014}\mathbf{\right)}}{\mathbf{Average}\mathbf{}\mathbf{Inventory}\mathbf{}\mathbf{2014}\mathbf{\left(}\mathbf{LIFO}\mathbf{\right)}}\\ \mathbf{=}\frac{\mathbf{\$}\mathbf{98}\mathbf{,}\mathbf{375}}{\mathbf{\$}\mathbf{5}\mathbf{,}\mathbf{398}\mathbf{.}\mathbf{5}}\\ \mathbf{=}\mathbf{18}\mathbf{.}\mathbf{22}\end{array}$

2) Sale and FIFO inventory

$\begin{array}{c}\mathbf{Average}\mathbf{}\mathbf{Inventory}\mathbf{}\mathbf{\left(}\mathbf{2015}\mathbf{\right)}\mathbf{=}\frac{\mathbf{Ending}\mathbf{}\mathbf{Inventory}\mathbf{}\mathbf{\left(}\mathbf{FIFO}\mathbf{2015}\mathbf{\right)}\mathbf{+}\mathbf{Ending}\mathbf{}\mathbf{Inventory}\mathbf{}\mathbf{\left(}\mathbf{FIFO}\mathbf{2014}\mathbf{\right)}}{\mathbf{2}}\\ \mathbf{=}\frac{\mathbf{\$}\mathbf{6}\mathbf{,}\mathbf{933}\mathbf{+}\mathbf{\$}\mathbf{6}\mathbf{,}\mathbf{801}}{\mathbf{2}}\\ \mathbf{=}\frac{\mathbf{\$}\mathbf{13}\mathbf{,}\mathbf{734}}{\mathbf{2}}\\ \mathbf{=}\mathbf{\$}\mathbf{6}\mathbf{,}\mathbf{867}\end{array}$

$\begin{array}{c}\mathbf{Inventory}\mathbf{}\mathbf{Turnover}\mathbf{}\mathbf{ratio}\mathbf{\left(}\mathbf{2015}\mathbf{\right)}\mathbf{=}\frac{\mathbf{Sale}\mathbf{}\mathbf{\left(}\mathbf{2015}\mathbf{\right)}}{\mathbf{Average}\mathbf{}\mathbf{Inventory}\mathbf{}\mathbf{2015}\mathbf{\left(}\mathbf{FIFO}\mathbf{\right)}}\\ \mathbf{=}\frac{\mathbf{\$}\mathbf{108}\mathbf{,}\mathbf{465}}{\mathbf{\$}\mathbf{6}\mathbf{,}\mathbf{867}}\\ \mathbf{=}\mathbf{15}\mathbf{.}\mathbf{8}\end{array}$

$\begin{array}{c}\mathbf{Average}\mathbf{}\mathbf{Inventory}\mathbf{}\mathbf{\left(}\mathbf{2014}\mathbf{\right)}\mathbf{=}\frac{\mathbf{Ending}\mathbf{}\mathbf{Inventory}\mathbf{}\mathbf{\left(}\mathbf{FIFO}\mathbf{2014}\mathbf{\right)}\mathbf{+}\mathbf{Ending}\mathbf{}\mathbf{Inventory}\mathbf{}\mathbf{\left(}\mathbf{FIFO}\mathbf{2013}\mathbf{\right)}}{\mathbf{2}}\\ \mathbf{=}\frac{\mathbf{\$}\mathbf{6}\mathbf{,}\mathbf{801}\mathbf{+}\mathbf{\$}\mathbf{6}\mathbf{,}\mathbf{244}}{\mathbf{2}}\\ \mathbf{=}\frac{\mathbf{\$}\mathbf{13}\mathbf{,}\mathbf{045}}{\mathbf{2}}\\ \mathbf{=}\mathbf{\$}\mathbf{6}\mathbf{,}\mathbf{522}\mathbf{.}\mathbf{5}\end{array}$

$\begin{array}{c}\mathbf{Inventory}\mathbf{}\mathbf{Turnover}\mathbf{}\mathbf{ratio}\mathbf{}\mathbf{\left(}\mathbf{2014}\mathbf{\right)}\mathbf{=}\frac{\mathbf{Sale}\mathbf{}\mathbf{\left(}\mathbf{2014}\mathbf{\right)}}{\mathbf{Average}\mathbf{}\mathbf{Inventory}\mathbf{}\mathbf{2014}\mathbf{\left(}\mathbf{LIFO}\mathbf{\right)}}\\ \mathbf{=}\frac{\mathbf{\$}\mathbf{98}\mathbf{,}\mathbf{375}}{\mathbf{\$}\mathbf{6}\mathbf{,}\mathbf{522}\mathbf{.}\mathbf{5}}\\ \mathbf{=}\mathbf{15}\mathbf{.}\mathbf{08}\end{array}$

Inventory turnover is the analysis of the flow of inventory during a particular period. When this flow is compared with the cost of inventory sold or total sales, it is called the inventory turnover ratio.

Inventory turnover can be based on cost or sales value. It depends upon the nature of the business for taking cost or sales as a base for computing turnover. Generally, manufacturing companies use COGS for computing inventory turnover. Retail companies can use both as a base for computing inventory turnover.

In the given case, it is not known the nature of the business for Kroger Company. So it can use any method, but inventory turnover based on COGS is preferred for all cases.

Inventory turnover based on COGS is the preferred method as the flow is compared against cost and not against the price. Cost is the true measure of the flow of inventory because, in this way, the inflation effect can be ruled out, and there would be consistency in the analysis of financial performance.