Barcode

DEFINITION of 'Barcode'

A graphical representation of a product's identifying information formed by a two-dimensional pattern of black and white shapes. Barcodes are able to be read by optical devices, such as a barcode reader or scanner, and are most commonly composed of parallel black and white lines. Barcodes are used to automate the transfer of product information, such as price, from the product to an electronic system, such as a cash register.

BREAKING DOWN 'Barcode'

Barcodes can allow stores to track inventory easily if linked to a database, which in turn helps companies track trends in consumer habits, order more inventory and adjust prices. If managed properly, they can help reduce the cash conversion cycle by lowering inventory and thus lowering the days inventory. They are on almost any product you can buy at the store. The most commonly used form of barcode is the Universal Product Code, first introduced in the 1970s for use in grocery stores. They allow stores to track inventory easily if linked to a database, which in turn helps companies track trends in consumer habits, order more inventory and adjust prices.

RELATED TERMS
  1. Quick Response (QR) Code

    A type of bar code which can be read by a digital device, and ...
  2. Radio Frequency Identification ...

    A technology that allows the identification of an item using ...
  3. Mobile Payment

    Money rendered for a product or service through a portable electronic ...
  4. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors ...
  5. Business Inventories

    An economic figure that tracks the dollar amount of inventories ...
  6. Average Inventory

    A calculation comparing the value or number of a particular good ...
Related Articles
  1. Investing

    Understanding Periodic Vs. Perpetual Inventory

    An overview of the two primary inventory accounting systems.
  2. Investing

    What is Involved in Inventory Management?

    Inventory management refers to the theories, functions and management skills involved in controlling an inventory.
  3. Investing

    Days Sales of Inventory

    Days Sales of Inventory, also called Days Inventory Outstanding, is a key financial measurement of a company's performance pertaining to inventory management. In simple terms, it tells how many ...
  4. Investing

    How to Analyze a Company's Inventory

    Discover how to analyze a company's inventory by understanding different types of inventory and doing a quantitative and qualitative assessment of inventory.
  5. Investing

    How to Calculate Average Inventory

    Average inventory is the median value of an inventory at a specific time period.
  6. Investing

    How Does a Perpetual Inventory System Work?

    Perpetual inventory is a system that continually tracks inventory items for quantity and availability.
  7. Investing

    Explaining Carrying Cost of Inventory

    The carrying cost of inventory is the cost a business pays for holding goods in stock.
  8. Investing

    Reading The Inventory Turnover

    Inventory turnover is a ratio that shows how quickly a company uses up its supply of goods over a given time frame. Inventory turnover may be calculated as the market value of sales divided by ...
  9. Investing

    Inventory Valuation For Investors: FIFO And LIFO

    We go over these methods of calculating this component of the balance sheet, and how the choice affects the bottom line.
  10. Professionals

    4 Lessons Small Businesses Can Learn From "The Profit"

    Learn some of the most valuable lessons that small business owners can glean from watching episodes of Marcus Lemonis' show, "The Profit."
RELATED FAQS
  1. Why should investors care about the Days Sales of Inventory (DSI)?

    Learn about days sales of inventory and what it measures; understand why an investor would want to know a company's days ... Read Answer >>
  2. How do you analyze inventory on the balance sheet?

    Learn how to analyze inventory using financial statements and footnotes by doing ratio analysis and performing qualitative ... Read Answer >>
  3. Why is it sometimes better to use an average inventory figure when calculating the ...

    For a couple of key reasons, average inventory can be a better and more accurate measure when calculating the inventory turnover ... Read Answer >>
  4. Does working capital include inventory?

    Learn about inventory that is part of current assets and working capital, which is the difference between current assets ... Read Answer >>
  5. How do you find a company's days sales of inventory (DSI)?

    Discover the formula to calculate days sales of inventory and how it is helpful to market analysts and investors, but it ... Read Answer >>
  6. How do I calculate the inventory turnover ratio?

    The inventory turnover ratio is a key measure for evaluating how efficient management is at managing company inventory and ... Read Answer >>
Hot Definitions
  1. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  2. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  3. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  4. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  5. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  6. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
Trading Center