LIFO AND RATIO ANALYSIS.
Abstract Investors, creditors, and managers are all interested in financial analysis. While they may have different goals in mind and may utilize a number of different methods, the most important methods used have one element in common. This is comparison. The actual data for the firm under analysis are compared to some standard in an attempt to measure the desirability of the results for this company. These standards may be from internal sources, such as a budget or past data concerning operations or external sources, such as results of other companies, in the same industry. One of the most common forms of comparative financial analysis involves the use of various ratios drawn from the financial statements. Many accountants discount the value of ratios used in comparative financial analysis. However, the fact remains that a great number of analysts do utilize such ratios. The purpose of the article is to examine the effect which the last-in, first-out method of inventory valuation may have on the uniformity of financial statements and thus the comparability of the ratios which may be drawn from these statements.
- DOI
- 10.2308/tar-7106857
- Volume
- 39 (1)
- Pages
- 70-85
- Language
- en
- Export
- BibTeX
- Sources
- openalex crossref