FIN621 Financial Statement Analysis GDB 27 May 2011

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Financial Statement Analysis (FIN 621)”

This is to inform that Graded Discussion Board (GDB)

has been opened according to the following schedule


Schedule

Opening Date and Time
May 27, 2011 At 12:01 A.M. (Mid-Night)

Closing Date and Time
May 31, 2011 At 11:59 P.M. (Mid-Night)

Note: No extra or bonus/grace period is available for attempting GDB.

Discussion Question
“ABC Limited deals in generators of different brands and capacity. The least expensive generator is priced at Rs. 500,000 and the most expensive generator cannot be sold for more than Rs. 5,000,000. The inventory of the generators consists of 20 generators and no two are alike.
ABC Ltd also owned XYZ (Pvt) Ltd producing battery cells. ABC Ltd planned to issue IPO of XYZ (Pvt) Ltd. within next five years; therefore, focusing on maximizing the profitability of the company XYZ (Pvt) Ltd, which is also facing the challenge of rapid inflation.”

Required: Identify most appropriate inventory valuation method for Company ABC Ltd and Company XYZ (Pvt) Ltd along with stating a valid reason for choosing particular inventory valuation method in just one line.

Hint: Write your answer in the following format.
.
Company Name
Answer:
ABC Limited
a) Inventory Method:________________________

b) Specific reason for choosing this method:____________________________________ __________________________________________

XYZ (Private) Limited

c) Inventory Method:_________________________

d) Specific reason for choosing this method:____________________________________ __________________________________________