Zimt AG wrote down the value of its inventory in 2017 and reversed the write-down in 2018.

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Zimt AG wrote down the value of its inventory in 2017 and reversed the write-down in 2018. Compared to the ratios that would have been calculated if the write-down had never occurred, Zimt’s reported 2017:

A . current ratio was too high.

B . gross margin was too high.

C . inventory turnover was too high.

Assume the companies use a periodic inventory system.

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International Financial Statement Analysis Workbook

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Authors: Thomas R. Robinson, Elaine Henry, Wendy L. Pirie

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Question Posted: Mar 27, 2024 02:02 AM

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Zimt AG wrote down the value of its inventory in 2017 and reversed the write-down in 2018.

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C is correct Th e writedown reduced the value of in...View the full answer

International Financial Statement Analysis Workbook

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