What is inventory turnover Ratio? Explain its significance.

Q: What are the important factors in using a perpetual inventory system?

A: There are two types of inventory systems: Perpetual and Periodic.

Q: How is Day Sales in Inventory calculated?

A: Inventory turnover ratio: This is a financial measure that is used to evaluate as to how many times…

Q: What are the different methods to estimate inventory?

A:

Q: Inventory turnover

A: Inventory turnover is a financial ratio showing the speed with which the inventory is rotated into…

Q: What effect does each method used have on the firm’s reportedprofits? On ending inventory levels?

A: Answer: The following is the effect that each method of inventory on firms reported profits:…

Q: difference between inventory and profitability

A: The basic framework of a business is that it purchases goods and services adds value to it and sells…

Q: Why is inventory management important to companies that have inventory?

A: Inventory: It refers to the items held by an organization which were in various forms like raw…

Q: What is an ABC analysis with regard to inventory?

A: ABC analysis: ABC analysis is an inventory classification technique used as a basic arrangement…

Q: When assessing inventory management policies, is the current ratio or acid-test ratio more…

A: Current Ratio = Current Ratio is Calculated by dividing the current Assets with current liabilties.…

Q: What is a LIFO inventory pool? How is the cost of ending inventory determined when pools are used?

A:

Q: whats the inventory tracking for this?

A: Goods which are held for the resale by the business and the business deals with such type of…

Q: Explain how the inventory cost flow assumption that was utilized might have an impact on liquidity…

A: Inventory Cost Flow Assumptions refer to the many ways for determining the cost of inventory sold…

Q: Explain the term inventory turnover.

A: The ratio analysis is performed to analyze the statements of the business on the basis of various…

Q: In calculating inventory turnover, why is cost of goods sold used as the numerator? As the inventory…

A: Inventory turnover ratio:Inventory turnover ratio is used to determine the number of times inventory…

Q: is a measure of inventory profitability that relates a gross margin to the cost of the inventory.

A: Inventory profitability means profits related to inventory cost which are calculated using these two…

Q: Define inventory shrinkage.

A:

Q: O and LIFO inventory management?

A: The method an organization uses to assess their inventory prices can have an effect on their…

Q: What is an inventory roll-forward? What roll-forward tests should be performed?

A: It is the systematic development by way of (rolling forward) pre-accounting data of fresh reporting…

Q: Is the book value of inventory on hand a relevant cost? Why?

A: Bearing on the future:   The significances of decisions are borne in the future, not the past. To be…

Q: What impact has a JIT inventory system on operating income?

A: JIT or just-in-time is a stock administration technique in which material, labor and products (to be…

Q: ith inflation, what are the implications of using LIFO and FIFO inventory methods? How do they…

A: FIFO: First in, first out (FIFO) is a method of asset management and valuation in which assets…

Q: What does the cost of merchandise inventory includes?

A: Merchandise Inventory: Merchandise is the stock of goods bought by a wholesaler, or a retailer, or a…

Q: What does the retail inventory estimates?

A: Retail inventory method:   The retail inventory method is used to calculate the value of ending…

Q: What is the amount of Oriole company's inventory?

A: Valuation of Inventory: When a company is compiling its financial accounts, one of the accounting…

Q: Explain the inventory cost flow assumption: FIFO, LIFO, weighted average. Provide examples.

A: The company will purchase the inventory, and it will be sold more than its cost to earn revenue for…

Q: What does a very high inventory turnover ratio signify? Please provide your own example to explain…

A: Inventory turnover ratio is one of the efficiency ratio, which says and calculates how many times…

Q: What is Included in Inventory?

A: Inventory is the assets available for sale and used in process of production of such assets for sale…

Q: What does an “upstream” sale of inventory refer to and when is the profit recognized?

A: Upstream sale of inventory: When a subsidiary sells goods to a parent company, is referred as…

Q: Which ratio is calculated to ascertain the efficiency of inventory management? *

A: Inventory Turnover Ratio:-This is the efficiency ratio that measures the efficiency of the company…

Q: Explain an example how to calculate net cost of inventory.

A: Net Cost of Inventory indicates the actual cost of inventory purchased. Net cost of inventory is…

Q: Explain the lower of cost or market rule for inventory valuation and explain why it is GAAP.

A: Lower of cost or market value for inventory valuation is just a mixture of many accounting…

Q: How would you interpret an inventory turnover ratio of 12.4?

A: The question is based on the concept of ratio analysis and an inventory turnover ratio. Inventory…

Q: How does inventory turnover provide information about a company’s short-term liquidity?

A:

Q: Which of the following is used to analyze the efficiency and effectiveness of inventory management?…

A: Formulas:  Inventory turnover ratio = Cost of goods sold / Average inventory Days' sales in…

Q: Why is it important to manage inventory?

A: Given: To manage the inventory as follows,

Q: Merchandise inventory turnover measures the relationship between:

A: Inventory Turnover Ratio:   It is an accounting ratio to show the number of times a company has sold…

Q: company will be affected by the changes in inventory method

A: Inventory method is a retail accounting method used to estimate the value of a store’s merchandise.…

Q: Which cost flow assumption generally results in the highest reported amount of net income when…

A: FIrst in first out or FIFO cost flow assumption provides highest net income when inventory prices…

Q: Stanley's inventory turnover ratio is?

A: The ratio is used to evaluate the firm's financial situation and helps management in making…

Q: Define weighted average inventory valuation method

A: There are 7 different method of issue of inventory, 1. First in First Out 2. Last in first out 3.…