Interest
Cost of Inventory = inventory x interest rate
The
interest cost of inventory reflects the interest
associated with holding inventory.
Insurance, storage, theft and obsolescence costs must
be added to the interest cost of inventory when
determining the total inventory holding costs.
The interest cost of inventory is included in the financial
statement ratio analysis spreadsheets highlighted in the
left column, which provide formulas, definitions,
calculation, charts and explanations of each ratio.
The interest cost of inventory is listed in our other
accounting ratios.
The interest cost of
inventory and other ratios are key to
understanding financial statements. Our
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The Interest Cost of
Inventory may be included in our
custom 1, 3 or 5 period financial
statement ratio analysis spreadsheet.
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