- CFA Exams
- 2021 CFA Level I Exam
- Study Session 8. Financial Reporting and Analysis (3)
- Reading 25. Inventories
- Subject 6. Financial Analysis of Inventories
CFA Practice Question
If ending inventory is overstated and beginning inventory is understated, the current ratio will be ______.
B. higher
C. constant
A. lower
B. higher
C. constant
Correct Answer: B
Overstated EI will make the current ratio larger than it actually is.
User Contributed Comments 3
| User | Comment |
|---|---|
| o123 | beginning inventory has no affect on CR |
| jgraham6 | good one!!! |
| cschulz316 | CURRENT ratio |