Asked by mohammad uzair on May 09, 2024
Verified
The days' sales in inventory ratio is computed by dividing ending inventory by cost of goods sold and multiplying the result by 365.
Days' Sales
A financial ratio that measures the average time it takes a company to convert its inventory into sales.
Ending Inventory
The total value of all inventory, including raw materials, work-in-progress, and finished goods, held by a company at the end of an accounting period.
Cost Of Goods Sold
The total cost associated with making or purchasing goods sold by a company during a specific period.
- Compute the days' sales in inventory and comprehend its importance.
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Learning Objectives
- Compute the days' sales in inventory and comprehend its importance.
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