See how our partners can help you ace your CFA exams.
Is "purchases" under balance sheet or income statement?
I just stumbled across a question regarding temporal v current rate and what happens to the following ratios when foreign currency is depreciating.
Payable turnover ratio = purchase / average payable
Quick ratio = (Cash + marketable securities + receivables) / CL
Inventory turnover ratio = COGS / average inventory
From my understanding quick ratio is a pure balance sheet ratio so no changes and inventory turnover ratio is definitely a mixed (cogs in I/S and inventory in B/S).
My question is where does purchases go? E.g. inventory would be under B/S and COGS would be under I/S.