Week 4: Inventory Management – Discussion
Inventory Management (graded)
A review of the balance sheet of a retailer, such as Wal-Mart, will disclose that in current assets the majority investment is in inventory. With manufacturers, such as Ford, the inventory is spread between three different categories. Let’s start our discussion with some basic inventory questions. How is inventory valued? Which inventory valuation method is most popular and why? What impact on the financial reports can the selection of an inventory valuation method have?