Asked by Brett Lucas on Jul 29, 2024
Verified
Which of the following is not a ratio included in analysis of the operating cycle?
A) Days to collect receivables.
B) Days to sell inventory.
C) Days to pay payables.
D) Days sales in inventory.
Days Sales In Inventory
A financial metric indicating the average time it takes for a company to turn its inventory into sales, reflecting inventory management efficiency.
Days To Pay Payables
An accounting metric that calculates the average number of days it takes a company to pay its invoices from suppliers, indicating how effectively a company is managing its outgoing cash flow.
- Acquire knowledge on the parts and relevance of the operating cycle.
Verified Answer
RK
rakshya khatiAug 02, 2024
Final Answer :
D
Explanation :
Days sales in inventory is a ratio included in analysis of the operating cycle. It measures the average number of days it takes for a company to sell its inventory. The other three ratios listed (days to collect receivables, days to sell inventory, and days to pay payables) are all included in the analysis of the operating cycle.
Learning Objectives
- Acquire knowledge on the parts and relevance of the operating cycle.
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