NO.PZ2018062018000038
问题如下:
Company M adopts the FIFO method while company N adopts the LIFO method. When the price tends to rise, company N will report a higher:
选项:
A.gross profit margin.
B.inventory turnover.
C.current ratio.
解释:
B is correct. When the price tends to rise, inventory balance of company N tends to be lower and the cost of sales tends to be higher, which will result in lower gross margin and higher inventory turnover (Inventory turnover= COGS/average inventory). Current ratio = current assets/current liabilities, lower inventory means lower assets, so the current ratio of company N is lower.
为什么在LIFO下,价格上升COGS会更高,但是为什么会导致inventory减少呢?