Apply a bead of glue along one side of center piece of wood (Image 1). Quickly spread glue with a fingertip then lay it flat and butt against right-side piece (Image 2). Apply glue to right side of left piece, spread with fingertip and butt against left side of center piece (Image 3). Make sure edges are lined up.
By deducting the value-of-inventory figure, you reduce your taxable income by as much as 88 percent (assuming a 12 percent average markup for inventory). You only pay taxes on your profits. Keeping track of your inventory costs reduces your tax bill by helping you arrive at a profit figure.
Inventory turnover measures the efficiency of the firm in managing and selling inventory. Inventory turnover is calculated with cost of goods sold in the numerator. Inventory turnover is a gauge of the liquidity of a firm's inventory. A low inventory turnover is generally a sign of efficient inventory management.