![]() Most of these variants are acceptable as long as the ratio is homogeneous, with aligned units for both values. ![]() The numerator always represents the flow of inventory, while the denominator always represents the state of inventory. Indeed, as soon as the goods are ordered, the company carries the risk associated with those quantities, and thus those quantities negatively impact the company’s supply chain agility. This includes the stock on hand but also the stock on order. the Average Inventory at Selling Price follows the same valuation metric as the one used for the net sales, but is applied to all the stock currently held by the company, as above.īoth perspectives require the whole inventory to be taken into account in the calculation.the Net Sales represent the revenue generated by the units sold for a given time period, not including taxes (like VAT) and temporary rebates or discounts.The selling perspective is reflected by: Inventory Turnover = Net Sales / Average Inventory at Selling Price This cost does not include inventory carrying costs. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |