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RMS - Inventory Value Report

RMS - Inventory Value Report

Owned by Brian Au
Last updated: Nov 20, 2023
2 min read

What is Inventory Value Report?

An Inventory Value Report is a document or statement that provides a detailed summary of the total value of a company's inventory at a specific point in time. This report is crucial for businesses to monitor and manage their inventory effectively. It typically includes information such as the quantity of each item in stock, the unit cost of each item, and the total value of each type of inventory.

Why do we need an Inventory Value Report?

  1. Financial Reporting: The value of inventory is often a significant asset on a company's balance sheet. Including this information in financial statements is crucial for providing an accurate representation of a company's financial health and performance. Investors, creditors, and other stakeholders use this information to assess the company's value and make informed decisions.

  2. Tax Reporting: Businesses are often required to report the value of their inventory for tax purposes. The Inventory Value Report helps in determining the cost of goods sold (COGS), which is a key factor in calculating taxable income.

  3. Cost Control: By analyzing the cost components in the Inventory Value Report, businesses can identify opportunities for cost control and process optimization. This can lead to improved profitability and operational efficiency.

How should we do it with Magestore Retail Management Software?

What does the Inventory Value report include?

  • MAC: Moving Average Cost of the product in all sources. This cost will be recalculated for a product each time the company receives that product from a PO.

  • Retail Price: The price on Magento of the product (price in default website).

  • Stock Value: The total value of the current quantities on hand.

    • Stock Value = Current MAC * Qty on Hand.

  • Potential Revenue: The estimated revenue you will earn after selling all current quantities on hand.

    • Potential Revenue = Retails Price * Qty on Hand.

  • Potential Profit: The estimated profit you will earn after selling all current quantities on hand.

    • Potential Profit = Potential Revenue - Stock Value.

  • Potential Margin: (Potential Profit/ Potential Revenue) * 100.

 

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