Report Analysis - How to Read the Statements

Inventory Turnover Rate

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 […]

Accounting Systems and Technology

Perpetual Inventory

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 […]

Terminology

Gross Domestic Product (GDP)

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 […]

Report Analysis - How to Read the Statements

An Explanation of Current Assets

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 […]