medium · CFA Level I Financial Statement Analysis
Nadir Components uses LIFO for its US-based operations. For the current year, it reports LIFO inventory of 400,000 and COGS of1,200,000. The LIFO reserve increased from 60,000 to85,000. The tax rate is 20%.
After restating to FIFO, Nadir's inventory turnover ratio (COGS/Average Inventory) will most likely:
- Decrease
- Increase
- Remain the same
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