What Is Average Cost Flow Assumption? Average cost flow assumption is a calculation companies use to assign costs to inventory goods, cost of goods sold (COGS), and ending inventory. An average is taken of all of the goods sold from inventory over the accounting period and that average cost is assigned to the goods. Average cost flow
What Is the Average Cost Method? The average cost method assigns a cost to inventory items based on the total cost of goods purchased or produced in a period divided by the total number of items purchased or produced. The average cost method is also known as the weighted-average method. Key Takeaways The average cost
What is the Average Daily Balance Method? The average daily balance is a common accounting method that calculates interest charges by considering the balance invested or owed at the end of each day of the billing period, rather than the balance invested or owed at the end of the week, month, or year. Key Takeaways Interest charges
What Is Average Daily Float? Average daily float refers to the dollar amount of checks or other negotiable instruments that are in the process of collection by a bank, financial institution, or other entity over a certain period, divided by the number of days in the period. When applied to the stock market, it can
What Is the Average Daily Rate (ADR)? The average daily rate (ADR) is a metric widely used in the hospitality industry to indicate the average revenue earned for an occupied room on a given day. The average daily rate is one of the key performance indicators (KPI) of the industry. Another KPI metric is the
What Is Average Daily Trading Volume (ADTV)? Average daily trading volume (ADTV) is the average number of shares traded within a day in a given stock. Daily volume is how many shares are traded each day, but this can be averaged over a number of days to find the average daily volume. Average daily trading
What Is Average Inventory? Average inventory is a calculation that estimates the value or number of a particular good or set of goods during two or more specified time periods. Average inventory is the mean value of inventory within a certain time period, which may vary from the median value of the same data set
What Is an Average Price Call? An average price call is a call option whose profit is determined by comparing the strike price to the average price of the asset that occurred during the option’s term. Therefore, for a three-month average price call, the holder of the option would receive a positive payout if the
What Is Average Price Put? An average price call is a put option whose profit is determined by comparing the strike price to the average price of the asset that occurred during the option’s term. Therefore, for a three-month average price call, the holder of the option would receive a positive payout if the average closing price
What Is Average Propensity to Consume? Average propensity to consume (APC) measures the percentage of income that is spent rather than saved. This may be calculated by a single individual who wants to know where the money is going or by an economist who wants to track the spending and saving habits of an entire
