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Basic Question 8 of 26
An inventory write-down has a positive effect on ______.
B. profitability ratios
C. activity ratios
A. liquidity ratios
B. profitability ratios
C. activity ratios
User Contributed Comments 3
| User | Comment |
|---|---|
| johntan1979 | That's why this topic is tested in the CFA exam. Very important to see how easily companies can manipulate activity ratios just by writing down inventory. If a company keep writing down inventory, something is not right. Therefore, don't just look at high inventory turnover as a good sign. |
| Rachelle3 | Thanks again johntan1979 |
| fredpat01 | thank you for giving the insight Johntan1979 |
I just wanted to share the good news that I passed CFA Level I!!! Thank you for your help - I think the online question bank helped cut the clutter and made a positive difference.
Edward Liu
Learning Outcome Statements
describe the measurement of inventory at the lower of cost and net realisable value and its implications for financial statements and ratios
CFA® 2024 Level I Curriculum, Volume 2, Module 6.