P$12-6($Static$)$ Analyzing the Impact of Alternatlve Inventory Methods on Selected Ratlos LO$12-7,12-9,$

$12-10$

Company A uses the FIFO method to cost inventory, and Company B uses the weighted$-$average cost method. The two companies are

exactly alike except for the difference in inventory costing methods. Costs of inventory items for both companies hove been rising

stesdily in recent years, and each company hos incressed its inventory esch year. Each compony hos paid its tax lisbility in full for the

current year $($and all previous years$),$ and each company uses the same accounting methods for both financial reporting and income

tox reporting, except for inventory valuation.

Required:

Identify which compony will report the higher amount for each of the following ratios. $($If no effect, select "None" from the dropdown

menu.$)$