The following information is available for the automotive division of Ford Motor Company for 2009. The company
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The following information is available for the automotive division of Ford Motor Company for 2009. The company uses the LIFO inventory method.
Instructions(a) Calculate the inventory turnover ratio and days in inventory.(b) Calculate the current ratio based on LIFO inventory.(c) After adjusting for the LIFO reserve, calculate the current ratio.(d) Comment on any difference between parts (b) and(c).
Inventory Turnover RatioInventory Turnover RatioThe inventory turnover ratio is a ratio of cost of goods sold to its average inventory. It is measured in times with respect to the cost of goods sold in a year normally. Inventory Turnover Ratio FormulaWhere,...
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Financial Accounting Tools for business decision making
ISBN: 978-0470534779
6th Edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
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