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nexus9112 [7]
3 years ago
15

Calculate the inventory-to-sale conversion period based on the following information: average inventories = $110,000; average re

ceivables = $90,000; average payables = $40,000; cost of goods sold = $173,000; and net sales = $365,000.
Business
1 answer:
Slav-nsk [51]3 years ago
4 0

Answer:

232.08 days

Explanation:

<em>Inventory to sales conversion period is the average length of time it will take a business to sell its stock items and then replace them. It give s an indication of patronage from customers and the shorter the better.</em>

It is determined as follows:

Average inventory period

= (Average inventory/cost of goods sold) × 365 days

= (110,000/173,000) × 365 days

= 232.08 days

<em>It takes on the average 232.08 days to sell and replace stock</em>

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