|Last-In, First-Out (LIFO) Inventory Method|
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Definition of Last-In, First-Out (LIFO) Inventory Method
Last-In, First-Out (LIFO) Inventory Method
The inventory cost-flow assumption that assigns the most recent inventory acquisition costs to cost of goods sold. The earliest inventory
A secured loan that gives the lender a lien against all the borrower's inventories.
In the mortgage pipeline, the risk that prospective borrowers of loans committed to be
A rise in a security's price above a resistance level (commonly its previous high price) or drop
Purchase of a controlling interest (or percent of shares) of a company's stock. A leveraged buy-out is
A method of constructing a replicating portfolio in which the manager purchases a
Refers to a situation where a firm runs out of cash and cannot readily sell marketable securities.
Under this currency translation method, all foreign currency balance-sheet and income
A range of payout ratios that is typical based on an analysis of comparable firms.
The average number of days' worth of sales that is held in inventory.
Average collection period.
A method of cash budgeting based on detailed estimates of cash receipts and cash
Percentage of earnings paid out as dividends.
Barrier option that expires if asset price hits a barrier.
Percentage change in the value of an option given a 1% change in the value of the
A type of mortgage pipeline risk that is generally created when the terms of the loan to be
Feasible target payout ratios
Payout ratios that are consistent with the availability of excess funds to make
First notice day
The first day, varying by contracts and exchanges, on which notices of intent to deliver
With CMOs, the start of the cash flow cycle for the cash flow window.
A method of valuing the cost of goods sold that uses the cost of the oldest item in
A time series regression to estimate the betas of securities portfolios.
The practice of reporting to shareholders using straight-line depreciation and
See: financial lease.
Tables that indicate how much each industry requires of the production of each other
For companies: Raw materials, items available for sale or in the process of being made ready for
A secured short-term loan to purchase inventory. The three basic forms are a blanket
The ratio of annual sales to average inventory which measures the speed that inventory
In the mortgage pipeline, risk that occurs when the originator commits loan terms to the
Just-in-time inventory systems
Systems that schedule materials/inventory to arrive exactly as they are
After a stock split, the number of shares distributed for each share held and the date of the
Last trading day
The final day under an exchange's rules during which trading may take place in a particular
A method of valuing inventory that uses the cost of the most recent item in
Leveraged buyout (LBO)
A transaction used for taking a public corporation private financed through the use
The last-in-first-out inventory valuation methodology. A method of valuing
With PAC bond CMO classes, the period before the PAC sinking fund becomes effective. With
Log-linear least-squares method
A statistical technique for fitting a curve to a set of data points. One of the
Management buyout (MBO)
Leveraged buyout whereby the acquiring group is led by the firm's management.
Monetary / non-monetary method
Under this translation method, monetary items (e.g. cash, accounts
To get or bring in as a net; to clear as profit.
The practice of making a charge in the income account equivalent to the tax savings
The method of trading used at futures exchanges, typically involving calling out the specific
The percentage increase in an option's value given a 1% change in the value of the
A call option is out-of-the-money if the strike price is greater than the market price
Actual forward rate expressed in dollars per currency unit, or vice versa.
Outstanding share capital
Issued share capital less the par value of shares that are held in the company's treasury.
Shares that are currently owned by investors.
Generally, the proportion of earnings paid out to the common stockholders as cash dividends.
Perfected first lien
A first lien that is duly recorded with the cognizant governmental body so that the lender
The percentage change in the quantity divided by the percentage change in the price.
The market has already incorporated information, such as a low dividend, into the price of a stock.
Accounting for an acquisition using market value for the consolidation of the two entities'
A method of allocating the purchase price for the acquisition of another firm among the
Simple compound growth method
A method of calculating the growth rate by relating the terminal value to
A method of cash budgeting that is organized along the lines of the statement of cash flows.
Running out of inventory.
A cash surplus generated by the sale of one block of securities and the purchase of another, e.g.
Target payout ratio
A firm's long-run dividend-to-earnings ratio. The firm's policy is to attempt to pay out a
Under this currency translation method, the choice of exchange rate depends on the
If 70 were bid in the market and there was no offer, the quote would be "70 bid without." The
Without the lender having any right to seek payment or seize assets in the event of
Informal arrangement between a borrower and creditors.
Realignment period of a temporary misaligned yield relationship that sometimes occurs in
FIFO (First In, First Out)
An inventory valuation method that presumes that the first units received were the first ones
The number of times a company sold out and replaced its average stock of goods in a year. The formula is:
LIFO (Last In, First Out)
An inventory valuation method that presumes that the last units received were the first ones
The value of the products that a retailing or wholesaling company intends to resell for a profit.
Goods bought or manufactured for resale but as yet unsold, comprising raw materials, work-in-progress and finished goods.
A list of all the labour or machining processes and times required to convert raw materials into finished goods or to deliver a service.
A method of adjusting accounts receivable to the amount that is expected to be collected based on company experience.
A method of preparing the operating section of the Statement of Cash Flows that uses the company’s actual cash inflows and cash outflows.
Direct write-off method
A method of adjusting accounts receivable to the amount that is expected to be collected by eliminating the account balances of specific nonpaying customers.
First-in, first-out (FIFO)
A method of accounting for inventory.
A method of preparing the operating section of the Statement of Cash Flows that does not use the company’s actual cash inflows and cash outflows, but instead arrives at the net cash flow by taking net income and adjusting it for noncash expenses and the changes from last year in the current assets and current liabilities.
The cost of the goods that a company has available for resale.
Last-in, first-out (LILO)
A method of accounting for inventory.
The number of shares that are in the hands of the public. The difference between issued shares and outstanding shares is the shares held as treasury stock.
Periodic inventory system
An inventory system in which the balance in the inventory account is adjusted for the units sold only at the end of the period.
Perpetual inventory system
An inventory system in which the balance in the inventory account is adjusted for the units sold each time a sale is made.
dividend payout ratio
Computed by dividing cash dividends for the year
A term describing the loss of products from inventory
inventory turnover ratio
The cost-of-goods-sold expense for a given
Refers to making an entry, usually at the close of a
Inventory Turnover Ratio
Provides a measure of how often a company's inventory is sold or
a process of service department cost allocation
a service department cost allocation approach
dividend growth method
a method of computing the cost
dollar days (of inventory)
a measurement of the value of inventory for the time that inventory is held
FIFO method (of process costing)
the method of cost assignment that computes an average cost per equivalent
a technique used to determine the fixed
a number (prefaced as a multiplier
judgmental method (of risk adjustment)
an informal method of adjusting for risk that allows the decision maker
method of least squares
see least squares regression analysis
method of neglect
a method of treating spoiled units in the
modified FIFO method (of process costing)
the method of cost assignment that uses FIFO to compute a cost per
net present value method
a process that uses the discounted
an abnormal or nonrepresentative point within a data set
a cost that is a current or near-current cash expenditure
the use, by one company, of an external
see make-or-buy decision
risk-adjusted discount rate method
a formal method of adjusting for risk in which the decision maker increases the rate used for discounting the future cash flows to compensate for increased risk
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