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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.
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The securing of the working capital needed for the support of raises in accounts receivable and inventory related with an organizations initial expansion time.
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I am facing some problems in my assignment on the topic Preliminary Screening. Can anybody suggest me the proper explanation for it?
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