PV (along with FV, I/Y, N, and PMT) is an important element in the time value of money, which forms the backbone of finance. There can be no such variable…

Then, to get an idea of how often inventory needs to be replaced, divide the ratio into the time period (usually 365 days). Doing so tells us that the inventory…

This short-term financing can be easier to qualify for but some options may carry higher costs so choose wisely. For the fiscal period ending Dec. 31, 2020, Ford had an…

A high inventory turnover generally means that goods are sold faster and a low turnover rate indicates weak sales and excess inventories, which may be challenging for a business. Whether…

Once these figures have been determined, the inventory turnover ratio can be calculated by dividing the cost of goods sold by the average inventory value. The inventory turnover rate takes…

Other examples include cleaning supplies, factory equipment, or office supplies. For an electronics retailer, finished goods refer to items like smartphones and laptops prepared for sale to consumers. We believe…

The revenue from merchandise sold during an accounting period is an expenditure on an income statement for the period during which it was sold. Any merchandise not sold in that…

This approach reduces storage and insurance costs, as well as the cost of liquidating or discarding excess inventory. Appropriate inventory management strategies vary depending on the industry. An oil depot…

Once finished goods have been purchased, ownership changes to the buyer and the goods are no longer inventory from the perspective of the seller. It can mean different things to…

These costs exclude variable costs required to manufacture products, such as direct materials and direct labor. In this case, for every product you manufacture, you allocate $25 in manufacturing overhead…