Analys Essay Example | Topics and Well Written Essays - 250 words

Analys - Essay ExampleJoe has taken a loan of $5000 which is not being put into any use since cash of $14,444 is lying idle.The high pelfability and strong liquidness of indicates that the overall financial position Joes firm is quite strong. However, Joe should better utilize the resources to generate to a greater extent revenue and expand his business.C) The document costing method that a firm uses does affect the level of profit in the income statement of a company. If the closing inventory is overstated, the cost of goods sold decrease, since the closing inventory is deducted when work out cost of goods sold, and when cost of goods sold decrease, net profit increase. The reason is that the units that remain in the closing inventory are not sold and hence they should not be included in the cost of goods sold.For example, if a company has a revenue of $2000, opening inventory of $300, purchases of $700 and closing inventory of $175 using come Cost method and $200 using FIFO me thod then its profit will be as