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What is Inventory turnover
The shortcoming of this ratio is that average calculation based on beginning and year-end inventory may not represent actual average in year. Other limitations in stock ratios are:
Inventory turnover is reciprocal of inventory days
Cost of sales/Average inventory (number of times)
It demonstrates how quickly the inventory is being sold. It illustrates the liquidity of inventories, the higher the figure the quicker the inventory is sold.
Can some one tell me how to calculate payback period and which formula i used to calculated payback period? Explain!!!!
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