Question: Garden Ltd uses the Moving Average method while Hill Ltd uses the LIFO (Last-In-First Out) method to calculate their Inventory that is recorded in their

Garden Ltd uses the Moving Average method while Hill Ltd uses the LIFO (Last-In-First Out) method to calculate their Inventory that is recorded in their financial statements. Will the use of different Inventory Costing systems selected by Garden Ltd and Hill Ltd affect your calculation of any of the above Ratios next year, if you were comparing the financial condition of the two Companies ? (2 marks)

the ratios in question are

Profit Margin

Current Ratio

Receivables Turnover

Equity Ratio

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