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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 »

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 »

The perpetual inventory system is the process of keeping inventory records in real-time. The company updates its inventory account as and when it makes new inventory purchases. On the other hand, the periodic system first adds the inventory to the purchases accounts, and after the inventory count, it adds the figures to the inventory account. …

Perpetual Vs. Periodic Inventory System – Key Differences Read More »

Inventory level control is referred to as controlling the threshold of inventory to avoid delay in production. It’s the level of inventory that should be available within the warehouse all the time. An important concept of inventory level controls is to create a balance between capital tied up in the inventory and the availability of …

Inventory Level Control – Definition, Formula, and Example Read More »