Open with a business scenario where Sarah needs to compare methods fast under investor scrutiny
Sarah Needs to Compare Methods Under Pressure
Sarah is meeting with a potential investor. The investor wants to see how COGS and ending inventory change under FIFO, LIFO, Specific ID, and Weighted Average. Sarah opens her workbook, toggles the method, and a formula breaks. The investor frowns. Today, your goal is to build a single model that can answer method-comparison questions quickly and defensibly with one source dataset.
Question 1: Method Impact
Show how COGS and ending inventory change when switching FIFO, LIFO, Specific ID, and Weighted Average.
Question 2: Why Different?
Explain why the same sales quantity can produce different COGS across methods.
Question 3: Recommendation
Defend which method gives the clearest story for this business and this price environment.
1. Sarah's investor asks for COGS under FIFO, LIFO, Specific ID, and Weighted Average in the same meeting. What workbook design supports that request fastest?
2. Prices are rising this month. Which method typically reports the highest COGS and lowest profit this period?
3. Which statement best describes how Specific ID differs from FIFO/LIFO?
4. What is the practical payoff of keeping all methods in one workbook model?
Discussion Prompt (3 minutes):
- Which method differences would an investor ask you to justify first?
- Why does an investor care whether Sarah can switch methods in one file?
- What outputs matter most to someone deciding whether to fund this business?