Obsolete Inventory

Not all inventory sells or makes it to the production line. Plans and markets change and that means some inventory items become obsolete. Dealing with obsolete items properly improves the accuracy of accounting related metrics and ratios. But more important to CEO's and business owners handling obsolete inventory effectively can actually improve efficiency and production while increasing the health of the balance sheet.

Cost of Goods Sold (COGS)

Many business execs have a difficult time understanding why their COGS number differs, often time significantly, from their purchases for the month. What is missing many times is a knowledge of how COGS is calculated when beginning and ending inventory are taken into account.

Inventory Turnover

Increasing inventory turnover holds the promise of doing more with less. There are two levers businesses can pull to increase inventory turnover, increasing sales or decreasing inventory carry cost. Both yield significant benefits to gross profit. If you've heard of inventory turnover but didn't quite understand what it meant this short video breaks it down.

LIFO

Accounting for inventory has been getting some attention in the press lately. The LIFO method is often not understood and CEO's would do well to know why their particular inventory method was chosen and what effect it has on the income statement and the tax return.