Recent Articles

Inventory

Inventory is traditionally associated with retail sales, but it includes raw materials for production, real estate in a portfolio, and various other examples. It even includes the depth of labor available for future consumption.

Inventory Turnover Rate

02/19/2016

One of the many ratios used in business, the inventory turnover rate is often misunderstood, miscalculated and misused.  The traditional business course in academia explains that ideally the inventory turnover ratio (rate) is the highest number [...]

Perpetual Inventory

10/10/2015

Most small businesses use the annual inventory system to determine ending inventory value. Any adjustments are to the income statement inside the cost of goods sold formula. This is acceptable if management only wanted accurate financial statements [...]

Inventory Management – Specific Identification Method

12/17/2014

There are several methods used to manage and track inventory in retail.  One of the most accurate inventory management tools is the specific identification method.  In this system each piece of inventory is monitored and tracked throughout the [...]

Gross Domestic Product (GDP)

06/30/2014

Gross Domestic Product is defined as the total production for the country.  It is measured by including all the dollars spent to purchase products/services from all the various sellers of goods.  The largest purchaser of products/services is [...]

Quick Ratio – Definition, Explanation and Proper Use

01/14/2014

The quick ratio is a formula used in business to identify the ability of a business to pay its current liabilities.  It is also known as the ‘Acid Test’ formula (ratio).  In the large markets this formula is one of the financial industry [...]

Point of Sale System – Introduction

12/03/2013

Almost all retail based operations require a Point of Sale (POS) System to properly record the customer and product activity.  So what is a Point of Sale System?  How is it set up?  What information should we get from this system?  How does a [...]

Inventory – How to Finance

04/16/2013

In financing a small business, there are a multitude of tools available.  One way to finance inventory is by using the 30 day pay program with your vendors.  Another tool is seasonal payment program and a third tool is exercising a line of credit [...]

An Explanation of Current Assets

03/11/2013

The asset side of the balance sheet is divided into 3 major sections.  They include current assets, fixed assets, and other assets.  Current assets carry the most value to the small business entrepreneur because of the cash conversion aspect.  [...]

Small Business Model Series Entry #4 – Basic Research

01/16/2013

Research is something I hate.  I don’t know which is worse, a dental visit or doing research.  This is why I didn’t go to college.  But, I know; I want to protect my hard earned dollars and I need to get smart about Automated Teller [...]

Liquidity – What Does This Mean?

01/12/2013

In business, liquidity is defined as the period of time it takes to turn assets into cash.  It takes 20 minutes to turn the balance in the checking account into cash.  You head on down to the bank and present a check.  You get cash.  But most [...]
1 2