Question

Do you think the chrysler decision to switch from lifo to fifo was beneficial to its stockholders?

Answer 1

yes I definitely affirm that the switch of Chrysler from LIFO to FIFO was beneficial to the stockholders mainly  because the profit figure was increased.

In several ways, the change improved Chrysler's financial results in 1970. In addition to cutting the 1970s loss by $20 million, it improved Chrysler's working capital. The change also made the comparison with 1969 earnings appear slightly more favorable because, after restatement, Chrysler's 1969 profit was only raised by $ 10.2 million from the original figures.

Finally, the change aided Chrysler's balance sheet by increasing inventories and thus current assets by $150 million at the end of 1970 compared to LIFO. As Chrysler's profit has plummeted in the last two years and its financial position has tightened, auto analysts have been wary of the company's shrinking current asset to current liability ratio. Chrysler, on the other hand, paid to improve its balance sheet and results. The primary benefit of LIFO is that it reduces profit and thus tax liabilities.

Learn more about LIFO here:

brainly.com/question/15344569

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