Accounting for IGCSE & O level - Advanced Principles (Section 2 - No. 29)
What is the formula used to calculate the 'average days to settle inventory'?
Inventory Turnover Ratio / 365
365 / Inventory Turnover Ratio
Cost of Goods Sold / Average Inventory
Average Inventory / Cost of Goods Sold
Explanation
Average days to settle is a calculation based on turnover.
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