A Company Uses a "LIFO Reserve" Because

question 11

Multiple Choice

A company uses a "LIFO reserve" because

• A)internal reporting and GAAP reporting is not the same as tax reporting
• B)internal reporting and GAAP reporting is the same as tax reporting
• C)internal reporting is the same as GAAP reporting and tax reporting
• D)internal reporting is not the same as GAAP reporting and tax reporting

---

Definitions:

EBIT

A financial metric that measures a firm's profit from its usual business operations, essentially its earnings before deducting interest and taxes.

EBIT-EPS Analysis

A tool used in financial analysis to determine the impact of leverage on a company's earnings per share (EPS) by holding earnings before interest and taxes (EBIT) constant.

Leverage Levels

The degree to which a business or investor is utilizing borrowed money.

EPS

Earnings Per Share, a company's profit divided by its number of outstanding shares of common stock, indicating how much money each share earns.