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Financial analysis (Account Catalog (Assets, Current assets, passive,…
Financial analysis
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Inventory Valuation
First it enters, first that leaves: It supposes that the first goods that are bought will be the ones that will be sold first.
First come, last out: It is based on the idea that a market where prices are in continuous increase should not be recognized speculative gains of inventory.
Average Cost: If the prices of the products that are bought fluctuate frequently, it is very convenient to use the average cost method.
Physical Inventory: Written instructions are prepared, which should be studied by all who participate in the inventory counting and monitoring.
Integral Percentages
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Turnover of accounts receivable: The total of sales to credit divided by the amount of accounts receivable indicates the turnover of that money.
Ratio of net cost to sales: The net cost of the merchandise sold should be kept at a minimum proportion with 100% represented by sales.
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