Select a public company(Bank of America, ExxonMobil, BP, Etc.), go to their annu

Question

Select a public company(Bank of America, ExxonMobil, BP, Etc.), go to their annual report and respond to the following:
a) Post the URL and company name where you found the annual report footnotes
b) What inventory method does the company use? (This information should be in the first footnote, Summary of Significant Accounting Policies.) Otherwise, look for a footnote dealing with inventory.
c) What is the Inventory Turnover Ratio for the most recent 2 years? (Show how you calculated these. Remember that you can use beginning and ending inventory values to obtain the average inventory and that the ending inventory in 2014 is the beginning inventory value in 2015 inventory, for example.) Is the turnover improving or not? Why?
d) Calculate the Days in Inventory for the most recent 2 years. Is there a positive or negative trend? Why?

Explanation / Answer

a) the annual report is avaiable at

http://cdn.exxonmobil.com/~/media/Reports/Summary%20Annual%20Report/2014_Summary_Annual_Report.pdf

B)

Inventories of crude oil, products, and merchandise are carried at the lower of current market value or cost (generally determined under the last-in, first-out method – LIFO). Inventories of materials and supplies are valued at cost or less.

c)

d)

2014 2013 Inventories crude oil          12,384          12,117 material            4,294            4,018 Total          16,678          16,135 average inventory          16,406 Sales       394,105 Inventory turnover ratio            24.02

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