How do you evaluate the consequences of inventory costs on working capital needs and the cash conversion period?
The cycle measures the average number of days that working capital is invested in the operating cycle. It starts by adding days inventory outstanding to days sales outstanding. This is because a company "invests" its cash to acquire/build inventory, but does not collect cash until the inventory is sold and the accounts receivable are finally collected. DIO + DSO – DPO
Answered by Christine W. -
Related Questions
-
Why is it important to evaluate the consequences of each opinion before you make a decision?
It is important to hear both sides of an issue before making ...
-
What is standard used to evaluate alternatives called In reasoning based on consequences?
People can use reasoning whenever they want to. ChaCha!
-
Evaluate consequences of inventory costs on working capital needs and the cash conversion period?
Please ask a question and ChaCha again!
-
Why is it important to evaluate the consequences of each option before you make a decision?
It is important to hear both sides of an issue before making ...
-
Consequentialism or utiliarianism is the view that normative ...
Comments