What is abc analysis, Financial Management

Assignment Help:

Q. What is ABC Analysis?

ABC Analysis: - ABC Analysis is a method of controlling different items of inventory. Generally a firm has to maintain several different items as inventory. All these items aren't equally important. Thus it isn't desirable to keep same degree of control on all these items. The firm must give more attention to those items whose value is higher in comparison to others.

In this analysis all the items of inventory are classified into three categories:-

(i) In category 'A' those items are incorporated which are small in number say 15 percent of the total items however they are quite valuable the value being 70 percent of the total value of the inventory.

(ii) Category 'B' stands midway as well as consists of items which are 30 percent in number and 20 percent of the total value.

(iii) In category 'C' those items are comprised which are quite large in number say 55 percent of the total items but carrying little value say 10 percent of the total value of inventory.


Related Discussions:- What is abc analysis

Calculate total amount of dividends in arrears, QTL Tech has an issue of pr...

QTL Tech has an issue of preferred shares outstanding with a $50 stated value that pays a dividend of 7.5%. There are 325,000 shares outstanding. QTL has not paid preferred share d

What is functional benchmarking, Best practice or functional benchmarking ...

Best practice or functional benchmarking Compare an internal function to 'the best' however not necessarily an organisation in same industry for example compare administrati

Describe duties of the financial manager in a business firm, Describe the d...

Describe the duties of the financial manager in a business firm? Financial managers evaluate the firm's performance, determine what are the financial consequence will be if the

Management accounting and financial management, Q. Distinguish between Mana...

Q. Distinguish between Management Accounting and Financial Management with clear mention of basis of differences. How does the traditional financial manager differ from the mode

State the importance of gearing in accounting, state the importance of gear...

state the importance of gearing in accounting Gearing is one of the most extensively used terms in accounting. Gearing is the relationship between debt and equitywhich means th

Calculate the investment in a project, BAGS, Inc. is considering an investm...

BAGS, Inc. is considering an investment in a new project. The required investment is $1,000,000. After-tax net cash flows are expected to be $50,000 the first year and are expected

zero salvage value, Big Joe's is changing a piece of equipment.  The equip...

Big Joe's is changing a piece of equipment.  The equipment will cost $5,000 and has a 5 year life.  The equipment can be leased for annual payment of $1,295 paid at the starting of

Project budgets and reporting systems, Project Budgets and Reporting System...

Project Budgets and Reporting Systems: In many cases, where a project is initiated and a budget allocated, a separate account is created to ensure costs attributable to that pr

Explain the concept of the world beta of a security, Explain the concept of...

Explain the concept of the world beta of a security. Answer:  The world beta calculates the sensitivity of returns to a security to returns to the world market portfolio. It is

Assembling the divestiture team, Assembling the Divestiture Team: Dives...

Assembling the Divestiture Team: Divestment of a business requires a team of functional experts under the direction of an experienced project manager. The first and foremost ac

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd