LIFO FIFO 转换

问题如下：

Q. Which group of ratios usually appears more favorable with an inventory write-down?

选项：

A.Activity ratios B.Solvency ratios C.Profitability ratios

解释：

A is correct. An inventory write-down increases the cost of sales and reduces profit and reduces the carrying value of inventory and assets. This has a negative effect on profitability and solvency ratios. However, activity ratios appear positively affected by a write-down because the asset base, whether total assets or inventory (denominator), is reduced. The numerator, sales, in total asset turnover is unchanged, and the numerator, cost of sales, in inventory turnover is increased. Thus, turnover ratios are higher and appear more favorable as the result of the write-down.