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Analyzing the Impact on Ratios from Changing Inventory Prices Consider two companies that are identical except for the way they value inventory. One company uses
Analyzing the Impact on Ratios from Changing Inventory Prices Consider two companies that are identical except for the way they value inventory. One company uses FIFO (Company F), while the other uses LIFO (Company L). Assume prices are rising in the markets in which these companies buy materials. Indicate for each ratio below which company (Company F, Company L, or neither) will have the larger ratio value. Ratio Company with Larger Ratio Value a. Current b. Working capital to total assets c. Inventory turnover d. Total liabilities-to-equity e. Total liabilities-to-total assets f. Book value per share g. Return on total assets h. Earnings per share
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