Hi all,
Can you please clarify this question,
If a company that uses US GAAP is applying the LIFO method and you want to compare against another company using FIFO, you will need to adjust for this difference, right?
The LIFO method would have a higher COGS (which if compared to FIFO) would result in a lower NOI and therefore lower taxes. Am I correct in this?
So the adjustment from LIFO to FIFO would increase assets by lowering the COGS and affect debt/equity ratio. Is this reasoning correct?
Thank you all for your time and help
The Owl