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Q: Is it true that the more inventory a company has in stock the greater the company's profit?
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What is the Virginia Companys goal?

As a joint stock company profit was the goal.


What is a share of a companys profit?

The stockholder's share of a company's profits are called dividends.


Is an inevtory an asset or liability?

Inventory is a current assets of company because by selling the inventory company earns revenue and generate profit


What is the definition of a companys cash flow?

A company's cash flow is the amount of cash (or income) that goes into a business. Cash usually comes from a product or service that a company sells for profit.


What are the advantages and disadvantages of profit related pay?

This kind of pay is directly related to the profits of a company. If the company does well and makes a high profit, then you in turn make for money. But if the companys profits decrease or even lose money, then you would in turn suffer a decrease in your pay.


What is a positive return on capital?

A positive return on capital is a profit. When the sales of a product are greater than the cost of producing the product, the company will make a profit.


What effect does an overstatement of inventory have on a company's financial statements?

Overstatement of closing stock will inflate profit and overstatement of opening stock will have an inverse effect.


How does Inventory contribute to company Profit?

Inventory is a balance sheet item. Costs added to inventory stay in inventory until the items are sold. There are many different ways to allocate these costs, at the discretion of the company. When items are sold, an allocation representing these items is moved from inventory to cost of sales (a.k.a. costs of goods sold) which becomes a cost for the period, match against an allocation of revenues for the period, which gives a figure for gross profit. Watch for trends in inventory from period to period, allowing for seasonality, and the gross margin (gross profit as a percent of revenues). The biggest thing to watch for is an unwarranted increase in inventory, which could indicate obsolescence, poor planning, or high returns. If inventories are too high, they are likely eventually to be written off.


What is profit retention?

it is the profit that is not distributed to the owners. In an LLC, the earnings are the property of the owners in direct relationship to the amount of stock. But the company can not afford to distribute that profit to the owners when there is inventory to build, receivables that are not collected, bills to pay, and maybe equipment to purchase.


1 In comparing the accounts of a merchandising company with those of a service company what additional accounts would the merchandising company likely use assuming it employs a perpetual inventory?

Cost of goods sold and Gross profit


What methods do not require a physical inventory periodic inventory system perpetual inventory method retail method or gross profit method?

periodic inventory system


What is profit in a company?

profit in a company this is increase in revenue received by the company. profit in a company this is increase in revenue received by the company.