Tag: inventory

Quick Ratio Analysis

Quick Ratio Analysis Definition The quick ratio, defined also as the acid test ratio, reveals a company’s ability to meet short-term operating needs by using its liquid assets. It is similar to the current ratio, but is considered a more reliable indicator of a company’s short-term financial strength. The difference between these two is that

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Quick Ratio Analysis Benchmark Example

Quick Ratio Analysis Benchmark Example Explanation Quick ratio calculation is a useful skill for any business that may face cash flow issues. Furthermore, quick assets include those current assets that presumably can be quickly converted to cash at close to their book values. It normally includes cash, marketable securities, and some accounts receivables. Current liabilities

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Perpetual Inventory System

See Also: Periodic Inventory System Just In Time Inventory System How to Manage Inventory Days Inventory Outstanding Analysis Inventory Turnover Analysis Supply Chain and Logistics Perpetual Inventory System Definition A perpetual inventory system is a continuously updated inventory management system. This type of system uses technology such as bar coding, computerized production operations, and perpetual

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Periodic Inventory System

See Also: Perpetual Inventory System Just in Time Inventory System Economic Order Quantity (EOQ) Days Inventory Outstanding Analysis How to manage inventory Periodic Inventory System Definition A periodic inventory system or the periodic inventory method is an accounting method in which you determine the amount of inventory at the end of each accounting period or

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Lower of Cost or Market (LCM)

See Also: Accounting Principles Accounting Concepts Generally Accepted Accounting Principles (GAAP) How to manage inventory Inventory Cost Lower of Cost or Market (LCM) Definition Lower of cost or market accounting is generally based off of the accounting concept conservatism. It generally states that certain accounts should be stated at their historical costs or market costs

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Implementing Activity Based Costing

See Also: Segmenting Customers for Profit Activity Based Management Standard Costing Process Costing Activity Based Cost Allocation Implementing Activity Based Costing Explanation All of us have used cost allocation, the process of assigning common costs to ending inventory and cost of goods sold (COGS), as part of our Financial Services offerings since it is required

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LIFO vs FIFO

See Also: Inventory Turnover Ratio Analysis Inventory to Working Capital Perpetual Inventory System Just in Time Inventory System Work in Progress LIFO vs FIFO – Last In, First Out vs First In, First Out In the field of accounting, LIFO vs FIFO are two methods of valuing inventory. LIFO assumes the last items acquired are

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Just in Time Inventory System

See Also: Inventory Turnover Ratio Perpetual Inventory System Just in Time Inventory System Inventory to Working Capital Analysis Value Drivers: Building Reliable Systems to Sustain Growth Just in Time Inventory System Definition The just in time inventory system, or JIT, is a system of managing inventory that is designed to improve efficiency and reduce waste

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How to Manage Inventory

See Also: Days Inventory Outstanding Inventory Turnover Ratio Just In Time Inventory System Perpetual Inventory System Supply Chain and Logistics How to Manage Inventory Tips Here are some ideas on how to manage inventory. 1. Consider the Costs of Storing Inventory There is cost in just storing inventory at your or an offsite location. Additionally,

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Inventory Turnover Ratio Analysis

See Also: Raise Inventory Turnover Ratio Economic Order Quantity LIFO vs FIFO Financial Ratios Days Inventory Outstanding Inventory Turnover Ratio Analysis Definition Inventory turnover ratio, defined as how many times the entire inventory of a company has been sold during an accounting period, is a major factor to success in any business that holds inventory.

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Inventory to Working Capital Analysis

See Also: Financial Ratios Mining the Balance Sheet for Working Capital Are You Collecting the Data You Need to Run Your Business? Net Sales Net Income Letter of Credit Inventory to Working Capital Definition Inventory to working capital ratio is defined as a method to show what portion of a company’s inventories is financed from

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Inventory Shrinkage

Inventory Shrinkage Definition Inventory shrinkage means that, somewhere along the line, there is a drop in product numbers from the time of manufacture to the time of sale. Clearly, this is a bad thing for both the consumer and the producer. On the producer side of things, the inventory shrinkage factor causes an uptick in

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