Question 1 5 In a period of rising prices, how would the following ratios be affected by the accounting decision to select LIFO, rather than FIFO, for inventory valuation Gross margin Decrease Current ratio Decrease Asset turnover Increase Debt to equity ratio Increase Average tax rate Decrease Question 2 5 Ratio Company A Company B Tax Burden 0 667 0 608 Interest Burden 0 857 1 0 EBIT Margin 0 07 0 111 Asset Turnover 2 5 2 0 Financial Leverage 2 1 5 Required Based on the DuPont five factor analysis, which company do you prefer to invest in and why Explain briefly Question 3 5 You have been hired as an analyst for Mellon Bank and your team is working on an independent assessment of Daffy Duck Food Inc (DDF Inc ) DDF Inc is a firm that specializes in the production of freshly imported farm products from France Your assistant has provided you with the following data for Flipper Inc and their industry Ratio 1999 1998 1997 1999 Industry Average Long term debt 0 30 030 0 25 0 35 Inventory Turnover 62 65 42 42 32 25 53 25 Depreciation Total Assets 0 25 0 014 0 018 0 015 Days sales in receivables 140 110 100 130 25 Debt to Equity 0 75 0 85 0 90 0 88 Profit Margin 0 062 0 07 0 06 0 075 Total Asset Turnover 0 35 0 45 0 60 0 40 Quick Ratio 1 028 1 03 1 029 1 031 Current Ratio 1 33 1 21 1 15 1 25 Times Interest Earned 5 9 4 375 4 45 4 65 Equity Multiplier 1 75 1 85 1 90 1 88 In the annual report to the shareholders, the CEO of Flipper Inc wrote, 1997 was a good year for the firm with respect to our ability to meet our short term obligations We had higher liquidity largely due to an increase in highly liquid current assets (cash, account receivables and short term marketable securities) Is the CEO correct Explain and use only relevant information in your analysis What can you say about the firm's asset management Be as complete as possible given the above information, but do not use any irrelevant information You are asked to provide the shareholders with an assessment of the firm's solvency and leverage Be as complete as possible given the above information, but do not use any irrelevant information Dear, Expert please answer all of the quetions I am waiting for your answers Thank you very much

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Question 1 [5] In a period of rising prices, how would the following ratios be affected by the accounting decision to select LIFO, rather than

Question 1 [5]

In a period of rising prices, how would the following ratios be affected by the accounting decision to select LIFO, rather than FIFO, for inventory valuation?

Gross margin: Decrease
Current ratio: Decrease
Asset turnover: Increase
Debt-to-equity ratio: Increase
Average tax rate: Decrease

Question 2 [5]

Ratio	Company A	Company B
Tax Burden	0.667	0.608
Interest Burden	0.857	1.0
EBIT Margin	0.07	0.111
Asset Turnover	2.5	2.0
Financial Leverage	2	1.5

Required: Based on the DuPont five-factor analysis, which company do you prefer to invest in and why. Explain briefly.

Question 3 [5]

You have been hired as an analyst for Mellon Bank and your team is working on an independent assessment of Daffy Duck Food Inc. (DDF Inc.) DDF Inc. is a firm that specializes in the production of freshly imported farm products from France. Your assistant has provided you with the following data for Flipper Inc and their industry.

Ratio	1999	1998	1997	1999- Industry Average
Long-term debt	0.30	030	0.25	0.35
Inventory Turnover	62.65	42.42	32.25	53.25
Depreciation/Total Assets	0.25	0.014	0.018	0.015
Days sales in receivables	140	110	100	130.25
Debt to Equity	0.75	0.85	0.90	0.88
Profit Margin	0.062	0.07	0.06	0.075
Total Asset Turnover	0.35	0.45	0.60	0.40
Quick Ratio	1.028	1.03	1.029	1.031
Current Ratio	1.33	1.21	1.15	1.25
Times Interest Earned	5.9	4.375	4.45	4.65
Equity Multiplier	1.75	1.85	1.90	1.88

In the annual report to the shareholders, the CEO of Flipper Inc wrote, 1997 was a good year for the firm with respect to our ability to meet our short-term obligations. We had higher liquidity largely due to an increase in highly liquid current assets (cash, account receivables and short-term marketable securities). Is the CEO correct? Explain and use only relevant information in your analysis.
What can you say about the firm's asset management? Be as complete as possible given the above information, but do not use any irrelevant information.
You are asked to provide the shareholders with an assessment of the firm's solvency and leverage. Be as complete as possible given the above information, but do not use any irrelevant information.

Dear, Expert please answer all of the quetions. I am waiting for your answers. Thank you very much.