Using this data, calculate the following ratios: return on sales, inventory turnover, inventory-on-hand period, and current ratio. **E6.16 FIFO versus LIFO: Ratio Analysis.**Presented below is financial data for two companies that are identical in every respect except that Company X uses the FIFO (First-In, First-Out) method to value its inventory and Company Z uses the LIFO (Last-In, First-Out) method. Using this data, calculate the following ratios: return on sales, inventory turnover, inventory-on-hand period, and current ratio. Which of the two companies is the better investment opportunity? Why?| | Company X | Company Z ||-----------------------|-----------|-----------|| Sales | $110,000 | $110,000 || Cost of goods sold | 49,500 | 60,000 || Net income | 27,750 | 17,250 || Inventory | 21,000 | 10,500 || Current assets | 64,000 | 53,500 || Current liabilities | 22,000 | 22,000 |

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FIFO versus LIFO: Ratio Analysis. Presented below is financial data for two companies that are identical in every respect except that Company X uses the FIFO method to value its inventory and Company Z uses the LIFO method to value its inventory. Using this data, calculate the following ratios: return on sales, inventory turnover, inventory-on-hand period, and current ratio. Which of the two companies is the better investment opportunity? Why? Company X Company Z Sales... $110,000 49,500 27,750 21,000 64,000 $110,000 Cost of goods sold Net income .. Inventory. 60,000 17,250 10,500 53,500 22,000 Current assets Current liabilities.. 22,000

FIFO versus LIFO: Ratio Analysis. Presented below is financial data for two companies that are identical in every respect except that Company X uses the FIFO method to value its inventory and Company Z uses the LIFO method to value its inventory. Using this data, calculate the following ratios: return on sales, inventory turnover, inventory-on-hand period, and current ratio. Which of the two companies is the better investment opportunity? Why? Company X Company Z Sales... $110,000 49,500 27,750 21,000 64,000 $110,000 Cost of goods sold Net income .. Inventory. 60,000 17,250 10,500 53,500 22,000 Current assets Current liabilities.. 22,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The inventory costinf method that best matches current costs with the current revenues is the 1) specific identificarion method 2) fifo method 3) lifo method 4) weighted average method 5) net method
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SOLVE FOR EFFICIENCY RATIOS
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