shortage

(noun)

a lack or deficiency

Related Terms

  • gross profit
  • inventory

Examples of shortage in the following topics:

  • Methods in Retail Inventory

    • Note that both the gross margin and the retail inventory methods can help you detect inventory shortages.
    • To illustrate how you can determine inventory shortages using the retail method, assume that a physical inventory taken at year end, showed only $62,000 of retail-priced goods in the store.
    • Assume that use of the retail method for the fourth quarter showed that $66,000 of goods should be on hand, thus indicating a $4000 inventory shortage at retail.
    • After converting the $4000 to $2400 of cost ($$4,000 \cdot 0.60$) you would report this as a "Loss from inventory shortage" in the income statement.
    • Knowledge of such shortages may lead management to reduce or prevent them, by increasing security or improving the training of employees.
  • Inventory Turnover Ratio

    • However, in some instances a low rate may be appropriate, such as where higher inventory levels occur in anticipation of rapidly rising prices or expected market shortages.
    • This often can result in stock shortages.
  • Importance of Cash Flow Accounting

    • A company can fail because of a shortage of cash even when it is profitable.
  • Working Capital Management Analysis

    • If money grew on trees, companies would never have a working capital shortage.
  • Categories of Goods Included in Inventory

    • A queue leading to a production step shows that the step is well buffered for shortage in supplies from preceding steps, but may also indicate insufficient capacity to process the output from these preceding steps.
Subjects
  • Accounting
  • Algebra
  • Art History
  • Biology
  • Business
  • Calculus
  • Chemistry
  • Communications
  • Economics
  • Finance
  • Management
  • Marketing
  • Microbiology
  • Physics
  • Physiology
  • Political Science
  • Psychology
  • Sociology
  • Statistics
  • U.S. History
  • World History
  • Writing

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