How can we calculate the average inventory, Financial Management

Assignment Help:

Inventory days

(Average inventory/Cost of sales) x 365days

Average inventory can be arrived by taking this year's and last year's inventory values and dividing by 2 - (Opening inventories+ closing inventories) / 2

This ratio shows how long the inventory stays in the company before it is sold. The lower the ratio the more efficient the company is trading, but this may result in low levels of inventories to meet demand.

A lengthening inventory period may indicate a slowdown in trade and an excessive build-up of inventories, resulting in additional costs.

 


Related Discussions:- How can we calculate the average inventory

Historical weights, Can some one tell me the defination of Historical weigh...

Can some one tell me the defination of Historical weights and how we calculate the historical weight?? And given the diffrence between Historical weight Vs Marginal weights??

Calculate amount of first coupon payment your organization, Your firm has p...

Your firm has presently issued five year floating-rate notes indexed to six-month U.S. dollar LIBOR plus 1/4%.  What is the amount of first coupon payment your organization will pa

Accounting system, Accounting System: The accounting systems are the pr...

Accounting System: The accounting systems are the primary financial systems that any business should have in place to ensure accurate and usable financial information. The b

Brigham, how do legal consideration affect a firms credit policy

how do legal consideration affect a firms credit policy

Valuation and duration of callable bonds , A callable bond is simil...

A callable bond is similar to an Option-free bond with a call option from the bondholder. It can be thought of as the sale of a call option by the investor

Illustrating a straddle, Options Traded on Legal and General August 14  200...

Options Traded on Legal and General August 14  2009 Share   Price         Exercise      Price    Calls       Puts                                 Sep        Dec        Mar

Source documents of an accounting system, Source documents of an accounting...

Source documents of an accounting system: Source documents are those documents that identify the particular transaction that is being recorded.  They act as an internal control

Corporate debt instruments, Corporate debt instruments are the financ...

Corporate debt instruments are the financial obligations of a corporation having priority over the claims of the shareholders (equity or preferred) at the time of

Regarding the assigment below, a-ii, should i calculate the co-variance of ...

a-ii, should i calculate the co-variance of the 30 securities?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd