Current Assets

What Causes Inventory Turnover Ratio To Increase Or Decrease?

The financial statements of any business entity give insights into any business entity’s financial health and performance. However, a business entity might need to perform further analysis to deeply evaluate the financial results. Therefore, companies perform different financial analyses. The popular type of analysis is sensitivity analysis, vertical & horizontal analysis, ratio analysis, growth rates, …

What Causes Inventory Turnover Ratio To Increase Or Decrease? Read More »

What is the Difference Between Current Assets and Current Liabilities?

The balance sheet is a financial statement that reports various account balances. Companies may combine several items under a single name or report them separately. Nonetheless, they accumulate those accounts to offer a financial picture of operations. The balance sheet is the only financial statement that presents those balances. Similarly, it does not report the …

What is the Difference Between Current Assets and Current Liabilities? Read More »

What is the LIFO Conformity Rule? Definition, Explanation, and More

Companies need revenues to stay in business. Usually, these revenues come from the sales of products and services. While services are perishable, companies can store products and sell them to various customers. These products form a company’s inventory or stocks. For product-based companies, inventories are crucial in generating sales and satisfying customer demand. There are …

What is the LIFO Conformity Rule? Definition, Explanation, and More Read More »

What are Work-in-Progress (WIP) inventories? Definition, Calculation, Example, and More

Many companies sell physical products, which constitute their primary income source. Some companies may manufacture these products while others acquire them from an external source. Usually, companies also keep their stock in hand so they can meet customer demand when it arises. These may include raw materials, finished goods, or work-in-progress inventory. Every type of …

What are Work-in-Progress (WIP) inventories? Definition, Calculation, Example, and More Read More »

Inventories Costing: Method, Example And More

Overview Inventory costing is an integral part of inventory control and inventory management. It helps a business determine its cost of goods sold and eventually in gross profits. Different inventory costing methods can bring the different cost of goods sold results. Although a business can use any inventory costing method. Certain methods have discrete benefits …

Inventories Costing: Method, Example And More Read More »

What Is a Periodic Inventory System? (Advantages and Disadvantages Included)

The periodic inventory system is the physical counting method for inventory management. It is performed periodically to calculate inventory figures that lead to the cost of goods sold. A periodic inventory system takes time and effort as it is a laborious activity. Small businesses mostly follow the periodic inventory system with low inventory requirements. However, …

What Is a Periodic Inventory System? (Advantages and Disadvantages Included) Read More »

Permanent Current Assets – Definition, Example and How Is It Different from Temporary Current Assets

Definition: Permanent Current Assets can be described as assets that are supposed to be maintained by the business over the course of time in order to ensure that the company is able to run its operations. These assets are considered to be current assets that tend to stay persistent on the balance sheet of the …

Permanent Current Assets – Definition, Example and How Is It Different from Temporary Current Assets Read More »