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Case 3 The Kroger Company Statistics Project Assignment (Statistics Project Sample)

Instructions:

check the Attached questions and show your work in details

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Content:
Case 3” The Kroger Company
Inventory turnover refers to the ratio of goods sold and average inventory.
Inventory turnover = Cost of sales/ inventory
Jan 31, 2015
1) 85512/5688= 15.0337
2) 85512/6933=12.334
Feb 1, 2014
1) 78138/5651= 13.83
2) 78138/6801= 11.489
January 31, 2015
sales/ inventory
1) 108,465/5688= 19.06909
2) 108465/6933=15.6447
February 1,2014
1) 98375/5651= 17.408
2) 98375/ 6801= 14.46
In this case, I would prefer sales/ inventory method to cost of sales/inventory, as cost of sales is calculated using LIFO which may prove biased in firms using FIFO inventory system.
CA8 – 10 WRITING (FIFO and LIFO)

FIFO

LIFO

Sales

37,600,000

37,600,000

COGS

Beginning inventory

8,000,000

8,000,000

Purchases

29,900,000

29,900,000

Ending inventory

(37,6000,000)

(37,200,000)

300,000

700,000

Gross profit

37,3000,000

36,900,000

Less;

Depreciation

900,000

900,000

Expenses

1,050,000

1,050,000

Operating (15%)

4,950,000

4,950,000

Dividends

450,000

450,000

(7,350,000)

(7,350,000)

29,950,000

29,550,000

Tax (40%)

(1,198,000)

(1,182,000)

Net income

29,752,000

28,768,000

EPS

2.9752

2.8768

The company should not shift to LIFO. Investors will be attracted by high EPS under FIFO. Investment decisions are based on return on investment (ROI). In the capital market and money markets, prospective investors are willing to risk their money in market funds with high EPS, as they expect a high return from their investment.
P9 - 3 (L01) (LCRNV – Cost of Goods Sold and Loss)
Inventory valuation allowance.
...
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