Different accounting practices will not have an impact on the comparative ratio analysis of the firms.
Answer the following statement true (T) or false (F)
False
Different accounting practices can distort comparisons. The inventory valuation and depreciation methods can affect the financial statements. See 2-4: Uses and Limitations of Ratio Analysis
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What includes all parties involved, directly or indirectly, in obtaining raw materials or a product?
A. Supply chain B. System chain C. Support chain D. Supply choice
Flattened management hierarchies allow companies to react more quickly to market changes
Indicate whether the statement is true or false
Strods Company reported the following purchases and sales of its only product. Strods uses a perpetual inventory system. Determine the cost assigned to cost of goods sold using FIFO.DateActivitiesUnits Acquired at CostUnits Sold at RetailMay 1Beginning Inventory150 units @ $10.00 5Purchase220 units @ $12.00 10Sales 140 units @ $20.0015Purchase100 units @ $13.00 24Sales 90 units @ $21.00
A. $5,440 B. $2,980 C. $2,850 D. $2,590 E. $2,460
Why is the long-term solvency ratio important for stakeholders?
A) It may indicate excessive inventories that cannot be sold. B) It indicates the earnings per share a stakeholder can expect to receive. C) It indicates the efficiency with which a firm uses resources. D) It indicates the firm's ability to generate cash. E) It may indicate collapse or takeover opportunities.