Question
What does the LIFO reserve measure in inventory analysis?
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Answer
The amount by which FIFO inventory exceeds LIFO inventory.
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Question
What is the formula for days of inventory on hand?
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Answer
365/Inventory turnover
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Question
If days of inventory on hand rises, what does that usually suggest?
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Answer
Inventory is moving more slowly or building up.
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Question
What does a higher inventory turnover generally imply about operations?
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Answer
Inventory is sold and replaced more efficiently.
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