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perpetual inventory system
track each purchase and sale of inventory; records continuously show inventory that should be on hand
periodic inventory system
does not track goods on hand; cogs is calculated at theh end of the accounting period due to a count
cog available for sale
beginning inventory + purchases = / ending inventory - cogs =
FOB Shipping point
buyer pays freight costs; ownership of the goods passes to the buyer when the public carrier accepts the goods from the seller
FOB destination
seller pays freight costs; ownership of the goods remains with the seller until the goods reach the buyer
gross profit rate
gross profit / net sales =
profit margin
net income / net sales =
quality of earnings ratio
net cash provided by operating activities / net income
