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Key Terms
Instructions: Please define the following key terms. Show Who? What? Where? When? Why Important?
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Inventory Turnover
Inventory turnover is a ratio that measures how many times a company's inventory is sold and replaced over a specific period, indicating efficiency in inventory management.
Average Daily Cost
The total cost associated with a process or product divided by the number of days in the period being considered.
Days' Sales
A financial metric, often calculated as days sales outstanding (DSO), that measures the average number of days it takes a company to collect payment after a sale has been made.
Retail Method
An inventory valuation method used by retailers that estimates inventory value by applying a cost to retail price ratio.
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