Case 3 The Kroger Company Statistics Project Assignment - 550 Words

Case 3 The Kroger Company Statistics Project Assignment (Statistics Project Sample) Content: Case 3 The Kroger CompanyInventory turnover refers to the ratio of goods sold and average inventory.Inventory turnover = Cost of sales/ inventoryJan 31, 20151) 85512/5688= 15.03372) 85512/6933=12.334Feb 1, 20141) 78138/5651= 13.832) 78138/6801= 11.489January 31, 2015sales/ inventory1) 108,465/5688= 19.069092) 108465/6933=15.6447February 1,20141) 98375/5651= 17.4082) 98375/ 6801= 14.46In 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 2 9,550,000 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....