The FIFO/LIFO choice impacts reported profitability, liquidity, activity, and leverage ratios. What general guideline would...
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Accounting
The FIFO/LIFO choice impacts reported profitability, liquidity, activity, and leverage ratios. What general guideline would you recommend that analysts make to financial statements to correct ratios for a firms choice of accounting method?
A. The general guideline is to use LIFO numbers for ratio components that are income- related.
B. The general guideline is to use FIFO-based data for components that are balance-sheet related.
C. Both A and B.
D. Neither A nor B
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