STATUTORY CONSOLIDATION Definition

Bookmark and Share

STATUTORY CONSOLIDATION is a merger where a new corporate entity is created from the two merging entities; the two merging entities then cease to exist. See also STATUTORY MERGER.

Learn new Accounting Terms

DAYS INVENTORY shows the average length of time items are in inventory, i.e., how many days a business could continue selling using only its existing inventory. The goal, in most cases, is to demonstrate efficiency through having a high turnover rate and therefore a low days' inventory. However, realize that this ratio can be unfavorable if either too high or too low. A company must balance the cost of carrying inventory with its unit and acquisition costs. The cost of carrying inventory can be 25% to 35%. These costs include warehousing, material handling, taxes, insurance, depreciation, interest and obsolescence. Formula: Inventory / (Net Revenue / 365).

MUTUAL AGENCY is the right of all partners in a partnership to act as agents for the normal business operations of the partnership, with the authority to bind it to business agreements.

Suggest a Term

Enter Search Term

Enter a term, then click the entry you would like to view.