About This Chapter
Asset & Inventory Management - Chapter Summary
Businesses must be able to manage assets and maintain inventory to ensure financial success. This chapter focuses on such topics as asset categorization, asset calculation formulas, inventory systems and inventory valuation. Check what you have retained from each lesson with self-assessment quizzes and contact instructors with any lesson-specific questions. Upon completion of this chapter, you should have the ability to do the following:
- Define and categorize business assets
- Explain total, current and non-current assets
- Calculate return on assets and inventory value
- Apply the capital asset pricing model
- Differentiate between perpetual and periodic inventory systems
- Describe various inventory valuation methods
1. Business Assets: Definition & Examples
Learn what business assets are, and find out some of the most common assets that companies have on their balance sheets in this lesson. Also, learn about some of the different ways that these assets are categorized.
2. Total Assets: Definition & Explanation
Assets come in many different categories and classifications. In this lesson, we will take a look at total assets. You will learn not only what total assets are but also where a company must report them.
3. What Are Current Assets? - Definition, Examples & Calculation
In this lesson, you will learn the meaning of the term current asset. You will also learn what items fall into the category of current assets and how they fit on a balance sheet.
4. Non-Current Assets: Definition & Examples
The accounting industry is centered on a basic equation: Assets = Liabilities + Owner's Equity. To fully understand this, you must first understand each component of the equation. In this lesson, we will discuss one category that falls under the classification of an asset: non-current assets.
5. Computing and Interpreting Return on Assets
There are a number of ratios that can be calculated by information found on the financial statements. In this lesson, you will learn about return on assets.
6. How to Calculate Asset Turnover Ratio: Formula & Example
The asset turnover ratio is one of the items that companies and potential stockholders look at in order to figure out how well a company's money is working for it. In this lesson, we will learn how to calculate a company's asset turnover ratio.
7. Capital Asset Pricing Model (CAPM): Definition, Formula, Advantages & Example
Learn about the Capital Asset Pricing Model (CAPM), one of the foundational models in finance. We'll look at the underlying assumptions, how the model is calculated, and what it can do for you.
8. Perpetual and Periodic Inventory Systems
Inventory management is an important part of business success. In this lesson, we will discuss the two types of inventory systems used in accounting today.
9. Inventory Valuation Methods: Specific Identification, FIFO, LIFO & Weighted Average
This lesson introduces you to the cost flow assumption methods of specific identification: FIFO, LIFO, and weighted average. You will also learn how to compute inventory in a perpetual system using the methods of FIFO, LIFO, and weighted average.
10. The Lower of Cost or Market of Inventory: Definition & Method
No matter what kind of inventory a company has, that inventory has value. In this lesson, we'll talk about valuing inventory using the lower of cost or market rule.
11. Net Realizable Value of Inventory: Definition & Method
Calculating inventory value is essential for correct reporting in accounting records. In this lesson, we are going to discuss what net realizable value is and why it plays an important role in inventory valuation.
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Other chapters within the Financial Accounting: Help and Review course
- Introduction to Accounting: Help and Review
- Financial Statements in Accounting: Help and Review
- Mechanics of the Accounting Cycle: Help and Review
- Project Evaluation & Analysis
- Preparing Financial Statements: Help and Review
- Internal Controls in Accounting: Help and Review
- Merchandising Operations and Inventory in Accounting: Help and Review
- Current and Long-Term Liabilities in Accounting: Help and Review
- Adjusting Accounts & Preparing Financial Statements: Help and Review
- Taxation of Business Entities
- Accounting Changes & Errors
- Classifying Costs in Accounting
- Cost Accounting Methods
- Cash Flow Statements & Disclosures
- Small Business Financing
- Small Business Accounting
- Financial Reporting