How Do I Use the Numbers?
Learning Objectives
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Convert reported LIFO cost of sales and inventory balances to FIFO cost of sales and inventory balances.
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Compare and contrast inventory turnover, gross margin, and profit margin based on FIFO accounting methods across companies, industries, and time.
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Differentiate the consequences of inventory accounting methods on ratios.
- Click the Express Route video below for an overview.
- Click one of the topics in the Scenic Route video for more explanations and real company examples.
- If you’re ready to start the exercises, click the exercise link below. Go back to the Scenic Route topics if you need more help.
Express Video:
Click here for the Express Route video [xx minutes]
Scenic Videos:
Click one of the topics below for a Scenic Route video
1. xxx [xx minutes]
2. xx [x minutes]
3. xx [xx minutes]
Exercises
Ready to do exercises? Click for exercises for this module
Take-aways:
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xxxxx
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Key terms:
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- xxx-
Key formulas:
- Inventory turnover = cost of sales / average inventories
- Gross margin = (revenues - cost of sales) / revenues
- Profit margin = pretax profit / revenues
