The Days in Inventory Is Computed by Multiplying Inventory Turnover

question 19

True/False

The days in inventory is computed by multiplying inventory turnover by 365.

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Definitions:

Financial Statement Item

Any line item or element found on a financial statement, such as an income statement or balance sheet, representing the financial performance or position of a business.

Base Amount

A reference value or starting point used in financial calculations to evaluate changes or differences in monetary terms.

Inventory Turnover

A ratio that measures how many times a company's inventory is sold and replaced over a specified period, indicating the efficiency of inventory management.

Average Inventory

A calculation to determine the median value of inventory within a given period, used for analyzing inventory management efficiency and cost of sales.