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Inventory Rules

Inventory Rules - 1 CF 2 =(BS 2 – BS 1 CF j =(BS j – BS...

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Inventory Rules An increase in Assets decreases cash Inventory is valued at Cost The Inventory Equation (Units): Ending Inventory = Beginning Inventory + manufacture – sales INV j = INV j-1 + MFG j – SALES j Ending Inventory in $$s goes straight to the Balance Sheet Inventory’s impact on Cash Flow is as follows: CF 1 = -BS
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Unformatted text preview: 1 CF 2 = -(BS 2 – BS 1 ) CF j = -(BS j – BS j-1 ) Where: (next slide) Inventory Rules- Cont’d CF is the Cash Flow Value BS is the Balance Sheet Value Subscript definitions: 1 is the 1 st period (month) 2 is the 2 nd period (month) j is any subsequent period (month) j-1 is the period (month) before j...
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Inventory Rules - 1 CF 2 =(BS 2 – BS 1 CF j =(BS j – BS...

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