Presents revenues and expenses in distinct categories to facilitate financial analysis. Credit period An inventory costing method that assumes that the most recent purchases are sold first. Debt obligations not due to be paid within the normal operating cycle or one year. A company's ability to pay its short-term financial obligations. The rate at which a company earns gross profit on its sales revenue. Presents the assets and liabilities of a business in separate subgroups. An inventory costing method that spreads the total cost of goods available for sale equally among all units. Includes all units that have been fully manufactured and are ready to be sold to customers. A measurement method that provides for the recognition of an inventory loss when the inventory's replacement cost declines below its acquisition cost. Indicates how many times a year a company sells its inventory. The cost of merchandise sold is calculated after every sale and the inventory balance