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Understanding ETFs Uses, Returns and Comparison with Mutual Funds and Stocks

 Exchange-Traded Funds (ETFs) have gained popularity among investors for their unique features and benefits. In this blog, we'll explore the uses of ETFs, their potential returns, how they differ from mutual funds and stock investments, and their safety profile. What is an ETF? An ETF is a type of investment fund that trades on stock exchanges, much like individual stocks. It holds a collection of assets, such as stocks, bonds, or commodities, and aims to track the performance of a specific index, sector, or asset class. Uses of ETFs Diversification : ETFs allow investors to gain exposure to a wide range of assets without having to purchase each individually. For instance, an ETF tracking the S&P 500 gives you exposure to 500 different stocks, reducing the risk associated with individual stock investments. Cost Efficiency : ETFs often have lower expense ratios compared to mutual funds. They typically pass on lower management costs to investors since they are often passively man
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Inventory valuation (Summary)

1.     According to accounting standard 2 inventories are tangible property held for sale in ordinary course of business, or in the process of production for such sale or for production of goods or service for sale.
2.     FIFO, LIFO, Average cost based stock and adjusting selling price are the different methods of inventory valuation.
3.     The FIFO methods assume that the closing inventory consists of the goods which entered the godown last and values than at their purchase cost.
4.     The LIFO methods assume that the closing inventory consists of the goods which entered the godown first and also values than at purchase cost.
5.     In the average price method, closing stock is valued either at simple average or at a weighed average of various purchase cost of material lying in the godown.
6.     The revised accounting standard 2 permits the use of FIFO or weighted average cost only for inventory valuation.
7.     A company has to follow disclosure of requirement for inventories as per schedule VI of the company Act.

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