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Commodity | Meaning Example | InvestingAnswers A commodity is a raw material that is bought and sold but is interchangeable with other materials of the same type -- such as oranges or lumber Companies that produce these goods sell them to the companies that will use them
Work in Process | WIP | InvestingAnswers Other components of inventory are raw material and finished goods Most companies list work in process clearly on the balance sheet Look down the left side of the balance sheet: WIP is usually listed with raw materials and finished goods, above the subtotal for total inventory Is Work in Process an Asset? Yes, work in process is an asset
Money Definition Example | InvestingAnswers That is, the paper or metal used to create the money is not worth very much in terms of its value as a raw material Most paper money is fiat money, and its value comes from what it represents rather than what it is Before 1971, the U S dollar was not fiat money -- it was backed by a corresponding amount of gold held with the Federal Reserve
Inventory | Examples Definition | InvestingAnswers Types of Inventory Three key types of inventory are used throughout the supply chain Each describes the condition of the products throughout the inventory management process – and where it stands between production and delivery 1 Raw Material Inventory The raw material inventory is at the beginning of the supply chain These are the materials the products will be created from For example
Factors of Production Definition Example | InvestingAnswers How do Factors of Production work? Without land, labor and capital, it's virtually impossible to create goods and services Land, for example, provides raw materials such as lumber, minerals and metals Labor represents the people and skills necessary to manipulate, process, distribute, market and handle raw materials as well as finished goods and services Capital represents the money
Backward Integration Definition Example | InvestingAnswers By controlling more of its supply chain, a company can not only lower costs and ensure access to key materials, but it can also indirectly manipulate competitors by affecting their access to raw materials as well In some cases, several companies might band together to purchase and control a supplier
Days Sales of Inventory (DSI) - InvestingAnswers How Does Days Sales of Inventory (DSI) Work? For example, let's say that XYZ Company had $15 million cost of sales for the year and $50,000 in inventory today Using this information and the formula above, we can calculate that Company XYZ's DSI is: DSI = ($50,000 $15,000,000) x 365 = 1 2166 Thus, we can say that Company XYZ burns through its inventory in about 1 2 days Why Does Days Sales of
Currency Definition Example | InvestingAnswers That is, this type of currency is not worth very much in terms of its value as a raw material Most paper money is fiat money, and its value comes from what it represents rather than what it is Asset-backed currencies tied to gold, silver or other valuable commodities are rare in present day markets Why Does Currency Matter?