Assume that you are a financial analyst. You are trying to compare the financial statements of Caterpillar, Inc., with those of CNH Global, an international company that uses international financial reporting standards (IFRS). Caterpillar, Inc., uses the last-in, first-out (LIFO) method to account for its inventories. IFRS does not permit CNH Global to use LIFO. Analyze the effect of this difference in accounting method on the two companies’ ratio values. For each ratio discussed in this chapter, indicate which company will have the higher (and the lower) ratio value. Also identify those ratios that are unaffected by the FIFO/LIFO difference. Ignore the effects of income taxes, and assume inventory costs are increasing. Then, based on your analysis of the ratios, summarize your conclusions as to which company looks better overall.