Deere is a global manufacturer and distributor of agricultural, construction, and forestry equipment. Suppose it reported the following information in its 2017 annual report. (In millions) 2017 2016 Inventories (LIFO) $2,267 $2,999
Current asset 32,910
Current liabilities 11,711
LIFO reserve 1,389
Cost of goods sold 15,661
Compute Deere inventory turnover for 2017 ratio.

5.95

Explanation:

Deere inventory turnover for 2017 ratio is:

Formula for Inventory Turnover Ratio= Cost of Goods sold / Average Inventory

Where Average Inventory = (Previous Inventory + Current Inventory) / 2

= ($2,267 + $2,999) / 2

=$5,266 / 2

=$2,633

Average Inventory = $2,633

Therefore, Inventory Turnover Ratio =  $15,661 / $2,633 = 5.9479 = 5.95

Deere Inventory Turnover for 2017 Ratio is  5.95.