So if the balance sheet value is 700,000, but the annual average inventory is 650,000, what do I use to calculate the operating current assets?
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Where are you now? In cost accounting? Cost accounting isn't standardized. Logically, you'd be better off using the inventory at the beginning of the year, which is the capital employed.
We needed the 700,000 now; the average is outdated! Of course, such a figure doesn't take into account the maturity of liabilities, so it's not really meaningful.