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Financial Terms | |
Average inventory |
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Definition of Average inventoryAverage inventoryThe beginning inventory for a period, plus the amount at the end of
Related Terms:Moving average inventory methodAn inventory costing methodology that calls for the re-calculation of the average cost of all parts in stock after every purchase. Average-Cost Inventory MethodThe inventory cost-flow assumption that assigns the average Inventory turnoverThe ratio of annual sales to average inventory which measures the speed that inventory INVENTORY TURNOVERThe number of times a company sold out and replaced its average stock of goods in a year. The formula is: ABC inventory classificationA method for dividing inventory into classifications, Arithmetic average (mean) rate of returnArithmetic mean return. AverageAn arithmetic mean of selected stocks intended to represent the behavior of the market or some ![]() Average accounting returnThe average project earnings after taxes and depreciation divided by the average Average (across-day) measuresAn estimation of price that uses the average or representative price of a Average age of accounts receivableThe weighted-average age of all of the firm's outstanding invoices. Average Amortization PeriodThe average useful life of a company's collective amortizable asset base. Average Collection Periodaverage number of days necessary to receive cash for the sale of Average collection period, or days' receivablesThe ratio of accounts receivables to sales, or the total Average cost of capitalA firm's required payout to the bondholders and to the stockholders expressed as a Average lifeAlso referred to as the weighted-average life (WAL). The average number of years that each Average maturityThe average time to maturity of securities held by a mutual fund. Changes in interest rates Average Propensity to ConsumeRatio of consumption to disposable income. See also marginal propensity to consume. Average Propensity to SaveRatio of saving to disposable income. See also marginal propensity to save. Average rate of return (ARR)The ratio of the average cash inflow to the amount invested. Average tax rateTaxes as a fraction of income; total taxes divided by total taxable income. average tax rateTotal taxes owed divided by total income. Blanket inventory lienA secured loan that gives the lender a lien against all the borrower's inventories. Book inventoryThe amount of money invested in inventory, as per a company’s Days' sales in inventory ratioThe average number of days' worth of sales that is held in inventory. Distribution inventoryinventory intended for shipment to customers, usually dollar days (of inventory)a measurement of the value of inventory for the time that inventory is held Dow Jones industrial averageThis is the best known U.S.index of stocks. It contains 30 stocks that trade on Dow Jones Industrial AverageIndex of the investment performance of a portfolio of 30 “blue-chip” stocks. Ending inventoryThe dollar value or unit total of goods on hand at the end of an Finished goods inventoryGoods that have been completed by the manufacturing Finished goods inventoryCompleted inventory items ready for shipment to First-In, First-Out (FIFO) Inventory MethodThe inventory cost-flow assumption that Fluctuation inventoryExcess inventory kept on hand to provide a buffer against Hedge inventoryExcess inventories kept on hand as a buffer against contingent In-transit inventoryinventory currently situated between its shipment and delivery Inactive inventoryParts with no recent prior or forecasted usage. InventoryFor companies: Raw materials, items available for sale or in the process of being made ready for InventoryGoods bought or manufactured for resale but as yet unsold, comprising raw materials, work-in-progress and finished goods. InventoryThe cost of the goods that a company has available for resale. InventoryGoods that a firm stores in anticipation of its later sale or use as an input. InventoryThe cost of unsold goods that are held for sale in the ordinary course of business or InventoryThose items included categorized as either raw materials, work-inprocess, Inventory adjustmentA transaction used to adjust the book balance of an inventory Inventory DaysThe number of days it would take to sell the ending balance in inventory at the Inventory diversionThe redirection of parts or finished goods away from their intended Inventory issueA transaction used to record the reduction in inventory from a location, Inventory loanA secured short-term loan to purchase inventory. The three basic forms are a blanket Inventory receiptThe arrival of an inventory delivery from a supplier or other Inventory returnsinventory returned from a customer for any reason. This receipt inventory shrinkageA term describing the loss of products from inventory Inventory ShrinkageA shortfall between inventory based on actual physical counts and inventory Inventory turnoverThe number of times per year that an entire inventory or a Inventory TurnoverRatio of annual sales to inventory, which shows how many times the inventory of a firm is sold and replaced during an accounting period. inventory turnover ratioThe cost-of-goods-sold expense for a given Inventory Turnover RatioProvides a measure of how often a company's inventory is sold or inventory write-downRefers to making an entry, usually at the close of a Just-in-time inventory systemsSystems that schedule materials/inventory to arrive exactly as they are Last-In, First-Out (LIFO) Inventory MethodThe inventory cost-flow assumption that assigns the most recent inventory acquisition costs to cost of goods sold. The earliest inventory Maximum inventoryAn inventory item’s budgeted maximum inventory level, MERCHANDISE INVENTORYThe value of the products that a retailing or wholesaling company intends to resell for a profit. Minimum inventoryAn inventory item’s budgeted minimum inventory level. Moving averageUsed in charts and technical analysis, the average of security or commodity prices Moving averageA price average that is adjusted by adding other Moving-averages chartA financial chart that plots leading and lagging Net inventoryThe current inventory balance, less allocated or reserved items. Obsolete inventoryParts not used in any current end product. Periodic inventoryA physical inventory count taken on a repetitive basis. Periodic inventory systemAn inventory system in which the balance in the inventory account is adjusted for the units sold only at the end of the period. Perpetual inventoryA system that continually tracks all additions to and deletions Perpetual inventoryA manual or automated inventory tracking system in which Perpetual inventory systemAn inventory system in which the balance in the inventory account is adjusted for the units sold each time a sale is made. Physical inventoryA manual count of the on-hand inventory. Raw materials inventoryThe total cost of all component parts currently in stock that Reconciling inventoryThe process of comparing book to actual inventory balances, Seasonal inventoryVery high inventory levels built up in anticipation of large Simple moving averageThe mean, calculated at any time over a past period of fixed length. Surplus inventoryParts for which the on-hand quantity exceeds forecasted vendor-managed inventorya streamlined system of inventory Vendor-managed inventoryThe direct management and ownership of selected WEIGHTED AVERAGEAn inventory valuation method that calculates a weighted average cost per unit for all the goods available for sale. Weighted averageA method of accounting for inventory. Weighted average cost of capitalExpected return on a portfolio of all the firm's securities. Used as a hurdle Weighted average cost of capitalSee cost of capital. weighted-average cost of capitalWeighted means that the proportions of weighted average cost of capitala composite of the cost of the various sources of funds that comprise a firm’s capital structure; the minimum rate of return that must be earned on new investments so as not to dilute shareholder value Weighted Average Cost of Capital (WACC)The weighted average of the costs of the capital components weighted-average cost of capital (WACC)Expected rate of return on a portfolio of all the firm’s securities, adjusted for tax savings due to interest payments. Weighted Average Cost of Capital (WACC)A weighted average of the component costs of debt, preferred shares, and common equity. Also called the composite cost of capital. Weighted average couponThe weighted average of the gross interest rate of the mortgages underlying the Weighted average lifeSee:average life. Weighted average maturityThe WAM of a MBS is the weighted average of the remaining terms to maturity weighted average method (of process costing)the method of cost assignment that computes an average cost per Weighted average portfolio yieldThe weighted average of the yield of all the bonds in a portfolio. Weighted average remaining maturityThe average remaining term of the mortgages underlying a MBS. Work-in-process inventoryinventory that has been partially converted through the FIFO method (of process costing)the method of cost assignment that computes an average cost per equivalent modified FIFO method (of process costing)the method of cost assignment that uses FIFO to compute a cost per Slow-moving itemAn inventory item having a slower rate of turnover than the TurnoverMutual Funds: A measure of trading activity during the previous year, expressed as a percentage of Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |