What Is a LIFO Liquidation? in a Period of Rising

question 73

Essay

What is a LIFO liquidation? In a period of rising costs, why is a LIFO liquidation feared?

---

Definitions:

All Equity Firm

A company that is financed solely through equity without the use of debt or leverage, relying entirely on shareholder funds.

Closely Held

A descriptor for corporations that have a small number of shareholders, with shares not publicly traded and often owned by family members or a small group of investors.

Borrow

The act of obtaining or receiving something with the intention of returning it or its equivalent, often involving money with an agreement to pay interest.

Capital Structure

The mix of different types of debt and equity that a company uses to finance its overall operations and growth.