The company reported cost of sales of $2,998.8 million in 2013 and $2,959.
The company reported cost of sales of $2,998.8 million in 2013 and $2,959.4 million in 2012. Use this information to answer the requirements. December 31 | 2013 | 2012 |
(in millions) | ||
Cash and cash equivalents | $ 272.7 | $ 359.1 |
Trade and other receivables, net of allowance of $15.2 and $19.2 | 467.4 | 446.2 |
Inventories | ||
Finished goods | 270.5 | 275.7 |
Work in process | 59.3 | 55.0 |
Raw materials and supplies | 239.4 | 229.4 |
LIFO reserve | (73.3) | (71.1) |
Total inventories, net | 495.9 | 489.0 |
Other current assets | 45.7 | 44.8 |
Total current assets | 1,281.7 | 1,339.1 |
Machinery and equipment | 1,184.5 | 1,161.7 |
Buildings and other | 612.2 | 603.2 |
Land | 44.5 | 45.3 |
Total property, plant and equipment | 1,841.2 | 1,810.2 |
Less accumulated depreciation | 1,266.6 | 1,237.4 |
Net property, plant and equipment | 574.6 | 572.8 |
Goodwill | 926.8 | 991.5 |
Other intangibles, less accumulated amortization | 203.4 | 206.3 |
Sundry | 121.6 | 145.2 |
TOTAL ASSETS | $3,108.1 | $3,254.9 |
Required:
a. Calculate common-sized inventories for both years and comment on any differences that you note. Given that the company is in the furniture manufacturing industry, does this ratio seem appropriate?
- Compute inventory turnover for both years and interpret any change. At December 31, 2011, Total inventories, net were $441 million.
c. Leggett & Platt uses LIFO for at least some of its inventory method. What would the company have reported as inventory in 2013 and 2012 if the company had used the FIFO method? At December 31, 2011, the LIFO reserve was $(85.7) million.
d. Recalculate cost of goods sold (COGS) under the FIFO method.
e. Recompute the inventory turnover ratios for 2013 and 2012 under the FIFO method. What difference do you notice between the FIFO-based ratios and the LIFO-based ratios?
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Rating:
/5
Solution: The company reported cost of sales of $2,998.8 million in 2013 and $2,959.