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Moving average inventory method |
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Definition of Moving average inventory methodMoving average inventory methodAn inventory costing methodology that calls for the re-calculation of the average cost of all parts in stock after every purchase.
Related Terms: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 age of accounts receivableThe weighted-average age of all of the firm's outstanding invoices. 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 (across-day) measuresAn estimation of price that uses the average or representative price of a 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. Blanket inventory lienA secured loan that gives the lender a lien against all the borrower's inventories. Capitalization methodA method of constructing a replicating portfolio in which the manager purchases a Current rate methodUnder this currency translation method, all foreign currency balance-sheet and income Days' sales in inventory ratioThe average number of days' worth of sales that is held in inventory. Direct estimate methodA method of cash budgeting based on detailed estimates of cash receipts and cash Dow Jones industrial averageThis is the best known U.S.index of stocks. It contains 30 stocks that trade on Flow-through methodThe practice of reporting to shareholders using straight-line depreciation and InventoryFor companies: Raw materials, items available for sale or in the process of being made ready for Inventory loanA secured short-term loan to purchase inventory. The three basic forms are a blanket Inventory turnoverThe ratio of annual sales to average inventory which measures the speed that inventory Just-in-time inventory systemsSystems that schedule materials/inventory to arrive exactly as they are Log-linear least-squares methodA statistical technique for fitting a curve to a set of data points. One of the Monetary / non-monetary methodUnder this translation method, monetary items (e.g. cash, accounts Moving averageUsed in charts and technical analysis, the average of security or commodity prices Normalizing methodThe practice of making a charge in the income account equivalent to the tax savings Purchase methodAccounting for an acquisition using market value for the consolidation of the two entities' Residual methodA method of allocating the purchase price for the acquisition of another firm among the Simple compound growth methodA method of calculating the growth rate by relating the terminal value to Simple moving averageThe mean, calculated at any time over a past period of fixed length. Statement-of-cash-flows methodA method of cash budgeting that is organized along the lines of the statement of cash flows. Temporal methodUnder this currency translation method, the choice of exchange rate depends on the Weighted average cost of capitalExpected return on a portfolio of all the firm's securities. Used as a hurdle 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 remaining maturityThe average remaining term of the mortgages underlying a MBS. Weighted average portfolio yieldThe weighted average of the yield of all the bonds in a portfolio. INVENTORY TURNOVERThe number of times a company sold out and replaced its average stock of goods in a year. The formula is: MERCHANDISE INVENTORYThe value of the products that a retailing or wholesaling company intends to resell for a profit. WEIGHTED AVERAGEAn inventory valuation method that calculates a weighted average cost per unit for all the goods available for sale. InventoryGoods bought or manufactured for resale but as yet unsold, comprising raw materials, work-in-progress and finished goods. Weighted average cost of capitalSee cost of capital. Allowance methodA method of adjusting accounts receivable to the amount that is expected to be collected based on company experience. Direct methodA 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 methodA method of adjusting accounts receivable to the amount that is expected to be collected by eliminating the account balances of specific nonpaying customers. Indirect methodA 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. InventoryThe cost of the goods that a company has available for resale. 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 inventory systemAn inventory system in which the balance in the inventory account is adjusted for the units sold each time a sale is made. Weighted averageA method of accounting for inventory. inventory shrinkageA term describing the loss of products from inventory inventory turnover ratioThe cost-of-goods-sold expense for a given inventory write-downRefers to making an entry, usually at the close of a weighted-average cost of capitalWeighted means that the proportions of Average Collection Periodaverage number of days necessary to receive cash for the sale of Inventory Turnover RatioProvides a measure of how often a company's inventory is sold or Weighted Average Cost of Capital (WACC)The weighted average of the costs of the capital components algebraic methoda process of service department cost allocation direct methoda service department cost allocation approach dividend growth methoda 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 high-low methoda technique used to determine the fixed judgmental method (of risk adjustment)an informal method of adjusting for risk that allows the decision maker method of least squaressee least squares regression analysis method of neglecta 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 methoda process that uses the discounted risk-adjusted discount rate methoda 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 simplex methodan iterative (sequential) algorithm used to solve multivariable, multiconstraint linear programming problems six-sigma methoda high-performance, data-driven approach to analyzing and solving the root causes of business problems step methoda process of service department cost allocation strict FIFO method (of process costing)the method of cost assignment that uses FIFO to compute a cost per equivalent unit and, in transferring units from a department, keeps the vendor-managed inventorya streamlined system of inventory 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 method (of process costing)the method of cost assignment that computes an average cost per Bootstrapping, bootstrap methodAn arithmetic method for backing an Moving averageA price average that is adjusted by adding other Moving-averages chartA financial chart that plots leading and lagging Average inventoryThe beginning inventory for a period, plus the amount at the end of Book inventoryThe amount of money invested in inventory, as per a company’s Finished goods inventoryGoods that have been completed by the manufacturing First in, first-out costing method (FIFO)A process costing methodology that assigns the earliest Payback methodA capital budgeting analysis method that calculates the amount of Perpetual inventoryA system that continually tracks all additions to and deletions Purchase methodAn accounting method used to combine the financial statements of Raw materials inventoryThe total cost of all component parts currently in stock that Work-in-process inventoryinventory that has been partially converted through the average tax rateTotal taxes owed divided by total income. Dow Jones Industrial AverageIndex of the investment performance of a portfolio of 30 “blue-chip” stocks. 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. 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. InventoryGoods that a firm stores in anticipation of its later sale or use as an input. Benefit Ratio MethodThe proportion of unemployment benefits paid to a company’s Benefit Wage Ratio MethodThe proportion of total taxable wages for laid off Average-Cost Inventory MethodThe inventory cost-flow assumption that assigns the average Average Amortization PeriodThe average useful life of a company's collective amortizable asset base.
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