Ford Motor Company uses FIFO and LIFO to account for different segmen.docx - Ford Motor Company uses FIFO and LIFO to account for different segments of

Ford Motor Company uses FIFO and LIFO to account for different segmen.docx

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Ford Motor Company uses FIFO and LIFO to account for different segments of its inventories. A no the company's most recent financial statements indicated that if FIFO had been used for the entire inventory, the total amount of inventory would have been almost $1 billion higher ($8.3 million vs. billion). a. Indicate whether each of the followingfinancial measuremekts would have been higher, lo or unaffected had Ford Motor Company used FIFO for its entire inventory. Explain the reas behind your answers. Gross profitrate. Reported net income. Current ratio (Ford's current ratio is greater than 1 to 1). Inventory turnover rate. Accounts receivable turnover rate. Cash payments made to suppliers. Net cash flow from operations (Ford's operating cash flows are positive). i. ii. iv. V. vi. vii. b. Provide your own

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