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Average inventory is a metric that is used because businesses tend to have fluctuating sales based on the time of year. Average inventory is used to determine the turnover in order to account for variations in sales. It’s calculated by adding beginning inventory to ending inventory and dividing it by two. If you have a …
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This also limits your food waste and reduces inventory shrinkage. For example, finished goods worth Rs 1,00,000 was sold for Rs. 1,20,0000. Here Rs. 1,20,000 is the revenue generated from the operations and Rs. 1,00,000 is your cost of inventory or cost of goods sold. These two account balances are then divided in half to …
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