Approaches to Value and Factors Considered in Firearms, Ammunition and Accessories Appraisals

The demand for Firearms has been steadily increasing over the past several years. With the potential for new federal regulations firearms enthusiasts have created an increase in sales for Firearm manufacturers and importers across the nation. Ammunition sales have also increased at a rate which manufacturers and distributors have still not been able to keep up with.

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While this upswing in business relating to the firearms industry is a positive factor in a liquidation scenario it might not be a good thing from the standpoint of an inventory advance. In today’s marketplace the fastest turning inventory is built, retrofitted, kitted or assembled as quickly as possible then shipped out to an eager customer base. Slower moving inventory tends to be ignored in such a dramatic upswing of business as most Company’s are focused on turning inventory which contributes most readily to cash flow.

An inventory appraisal on Firearms, ammunition and accessories is important because, like any inventory, the mix and overall turns needs to be analyzed. JCM assigns bifurcated valuation rates to inventory categories on a declining balance of inventory turns. Thus, more value is given to the inventory which is turning multiple times per year and less value is given to the inventory which is slow moving and may turn fewer than one time per year.

Firearms, accessories and ammunition are also somewhat tied to weather. If a particular hunting region is affected by dramatic changes in weather (drought, flooding, heavy snow etc.) the overall allowance of Federal Fish and Game permits may preclude hunters from visiting certain areas. While this does not comprise the core business within the industry, fairly steady sales are attributed with the start of each hunting season.

Glossary of Terms

 

Things to remember

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Key Terms When Appraising Firearms & Ammunition

The working mechanism of a firearm. Various types exist, including single-shots, multi-barrels, revolvers, slide- or pump-actions, lever-actions, bolt-actions, semi-automatics and automatics.

This generally refers to the assembled components of complete cartridges or rounds i.e., a case or shell holding a primer, a charge of propellant (gunpowder) and a projectile (bullets in the case of handguns and rifles, multiple pellets or single slugs in shotguns). Sometimes called “fixed ammunition” to differentiate from components inserted separately in muzzleloaders.

A gun mechanism activated by manual operation of the breechblock that resembles a common door bolt.

The interior of a firearm’s barrel excluding the chamber.

The projectile expelled from a gun. It is not synonymous with cartridge. Bullets can be of many materials, shapes, weights and constructions such as solid lead, lead with a jacket of harder metal, round-nosed, flat-nosed, hollow-pointed, etc.

The nominal diameter of a projectile of a rifled firearm or the diameter between lands in a rifled barrel. In this country, usually expressed in hundreds of an inch; in Great Britain in thousandths; in Europe and elsewhere in millimeters.

A rifle with a relatively short barrel. Any rifle or carbine with a barrel less than 16″ long must be registered with the Bureau of Alcohol, Tobacco and Firearms. Shotguns with barrels less than 18″ long fall into the same category.

A single, complete round of ammunition.

The envelope (container) of a cartridge. For rifles and handguns it is usually of brass or other metal; for shotguns it is usually of paper or plastic with a metal head and is more often called a “shell.”

A cartridge with its primer located in the center of the base of the case. 

The rear part of the barrel that is formed to accept the cartridge to be fired. A revolver employs a multi-chambered rotating cylinder separated from the stationary barrel.

A constriction at or near the muzzle of a shotgun barrel that affects shot dispersion.

A rifle, shotgun or handgun using gunpowder as a propellant. By federal definition, under the 1968 Gun Control Act, antiques are excepted. Under the National Firearms Act, the word designates machine guns, etc. Airguns are not firearms.

The bore size of a shotgun determined by the number of round lead balls of bore diameter that equals a pound.

The British restrict the term in portable arms to shotguns. Here it is properly used for rifles, shotguns, handguns and airguns, as well as cannon.

Chemical substances of various compositions, particle sizes, shapes and colors that, on ignition, serve as a propellant. Ignited smokeless powder emits minimal quantities of smoke from a gun’s muzzle; the older blackpowder emits relatively large quantities of whitish smoke.

Synonym for pistol.

The envelope enclosing the core of a bullet.

A gun mechanism activated by manual operation of a lever.

Synonymous with “handgun.” A gun that is generally held in one hand. It may be of the single-shot, multi-barrel, repeating or semi-automatic variety and includes revolvers.

The housing for a firearm’s breech (portion of the barrel with chamber into which a cartridge or projectile is loaded) and firing mechanism.

A shoulder gun with rifled bore.

A rimmed or flanged cartridge with the priming mixture located inside the rim of the case. The most famous example is the .22 rimfire. It has been estimated that between 3-4 billion .22 cartridges are loaded in the U.S. each year.

Synonym for a cartridge.

A shoulder gun with smooth-bored barrel(s) primarily intended for firing multiple small, round projectiles, (shot, birdshot, pellets), larger shot (buck shot), single round balls (pumpkin balls) and cylindrical slugs. Some shotgun barrels have rifling to give better accuracy with slugs or greater pattern spread to birdshot.

The cartridge for a shotgun. It is also called a “shell,” and its body may be of metal or plastic or of plastic or paper with a metal head. Small shotshells are also made for rifles and handguns and are often used for vermin control.

A gun mechanism activated by manual operation of a horizontally sliding handle almost always located under the barrel. “Pump-action” and “trombone” are synonyms for “slide-action.”