Business Lesson

Live from Louisiana State University

Live from Louisiana State University

I’ve been spending the week at the Graduate School of Banking at Louisiana State University, teaching bankers about small businesses. I’m sporting my purple shirt and spent some time visiting world-famous Mike, LSU’s mascot.

It’s been a great week. I love sharing what I learned running my own businesses and also helping others run theirs. It’s gratifying helping bankers understand the small business mindset. In return, I always glean learnings from the bankers’ insights. 

Business Lesson 1 - Estimating Inventory Value Using Gross Profit

Business Lesson 1 - Estimating Inventory Value Using Gross Profit

I love incorporating business principles almost as much as I love using technology. They both have played a big role in my business success. As a small business consultant, I’m often asked the best way to estimate the value of inventory. One method is based on gross profit. Warning – this post does come with a quiz at the end.

The gross profit method of valuing inventory is a technique using a company’s historical or projected gross profit margin to estimate cost of goods sold during a period. The gross profit method assumes the gross profit ratio remains stable during the period.