Ratios Are Used Only by Company Management,and Not Investors,to Evaluate

question 102

True/False

Ratios are used only by company management,and not investors,to evaluate the financial health of a company.

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Definitions:

LIFO Cost Method

A method of inventory valuation where the last items added to the inventory are considered the first ones sold.

Gross Profit

Gross profit is the financial metric obtained by subtracting the cost of goods sold from sales revenue, representing the core profitability of a company's products or services.

FIFO

An inventory valuation method that assumes that the first items put into inventory are the first ones sold.

Beginning Inventory

The value of a company’s inventory at the start of an accounting period, carried over from the end of the previous period.