The chief investment officer of a large mutual fund made the following statement: "I prefer to use the debt/equity ratio instead of the debt/asset ratio because the latter ratio is sensitive to the measure of inventory where accountants can choose LIFO, FIFO, or weighted averaging. Therefore, I use the debt/equity ratio so that I do not have to worry about which inventory valuation method the accountant used when I run comparisons between companies."
Comment on the preceding statement.

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The Answer of The chief investment officer of a large mutual fund made the following statement: "I prefer to use the debt/equity ratio instead of the debt/asset ratio because the latter ratio is sensitive to the measure of inventory where accountants can choose LIFO, FIFO, or weighted averaging. Therefore, I use the debt/equity ratio so that I do not have to worry about which inventory valuation method the accountant used when I run comparisons between companies."
Comment on the preceding statement.

The Chief Investment Officer of a Large Mutual Fund Made