What is inventory turnover, Financial Management

Assignment Help:

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:

  • Inclusion of obsolete stock
  • Different stock valuation policies

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.

 


Related Discussions:- What is inventory turnover

How to calculate the future value of an annuity, Calculate the Future Value...

Calculate the Future Value of an Annuity: Annuity is stated as periodic payment every period for a number of periods. This periodic payment is the same each year only then it c

Mortgages, A mortgage may be defined as a pledge of property ...

A mortgage may be defined as a pledge of property to secure a debt payment; in this context, we will use the term property to mean real estate. If the

Determine what is current ratio - position ratios, Determine Current ratio...

Determine Current ratio  or working capital ratio CA = Current assets/Current liabilities (times) Current ratio measures the short term solvency or liquidity; it demonstra

Credit analysis for formulation of optimum credit policy, Q. Credit Analysi...

Q. Credit Analysis for Formulation of Optimum Credit Policy? Credit Analysis: - Credit Analysis is made to estimate the credit worthiness of the customers before making credi

Investor’s considerations -financial market, Investor's Considerations ...

Investor's Considerations As mentioned above, every investor before taking an investment decision, must consider the following aspects: Risk: The primary consideration for t

Costs affect the capital budgeting decision-making process, How do opportun...

How do opportunity costs affect the capital budgeting decision-making process? Opportunity costs reflect the foregone advantages of the alternative not chosen when a capital bu

Operating cycle, make an cash conversion cycle of cabbages

make an cash conversion cycle of cabbages

Explain significance of international financial management, Why is it impor...

Why is it important to study international financial management? Answer:  We are now living in a world in which all the main economic functions, that are production, consumption,

How does the market determine the fair value of a bond, How does the market...

How does the market determine the fair value of a bond? The fair value of a bond is a present value of the bond's coupon interest payments plus the present value of the face va

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