Computing Financial Ratios LIFO Reserve

Related BrainMass Solutions

• Financial Statement Analysis with FIFO/LIFO Considerations

  Compute teh ratios above considering the LIFO reserve. c. Comment on the apparent liquidigy, debt, and profitability, considering both sets of ratios.

• Financial ratio analysis

  When computing financial relationships, a good indication of the company's financial strengths and weaknesses becomes clear. Examining these ratios over time provides some insight as to how effectively the business is being operated.

• Harsco: FIFO and LIFO inventory valuations; change in net income

  What would the LIFO reserve have been on December 31, 2006 if no LIFO liquidation had occurred in 2006?

• Locating the Financial Statements of a Company On-Line

  Lastly, for the fiscal year just ended, no LIFO reserve is established since the values of the company's inventories at LIFO approximate their FIFO values.

• Inventory, Real Estate and depreciation:

  (b) Calculate the current ratio based on inventory as reported using LIFO. (c) Calculate the current ratio after adjusting for the LIFO reserve. (d) Comment on any difference between parts (b) and (c).

• Advantages and disadvantages of using a LIFO inventory system

  Distorts crucial ratios, like current ratio, debt-to-worth ratios, and inventory turnover If a company that sells goods and services finds the costs of items increasing, the company can use LIFO which would result in less taxable income and less income

• Healthcare: Two common inventory methods, choose the best

  Explain how each method effects the financial statement of the organization. The two most common are LIFO and FIFO. LIFO is last in first out and it expenses the current prices in computing profit.

• Current ratio with adjustment for the LIFO reserve

  By adding the reported LIFO reserve to the balance sheet LIFO inventory number, one can estimate FIFO inventory. To adjust the current ratio, we should add the LIFO reserve to the numerator, converting LIFO inventory to FIFO inventory.

• Rare Metals: Ratios under LIFO or FIFO, explain diffs, purchases

  Financial information is given assuming the use of the first-in, first-out (FIFO) method of inventory valuation and also the last-in, first-out (LIFO) method of inventory valuation.