Which Financial Indicator Measures the Number of One Day's Worth

question 48

Multiple Choice

Which financial indicator measures the number of one day's worth of inventory that a company has on hand at any given time?

• A) days of cash
• B) days of inventory
• C) average collection period
• D) fixed asset turnover
• E) inventory turnover

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Definitions:

Financing Activities

Transactions related to raising capital, repaying investors, and restructuring company debt within a business's cash flow statement.

Long-Term Debt

Borrowed money that is due for repayment more than one year into the future.

Financing Activities

Financing activities involve transactions between a company and its investors or creditors, affecting the equity and long-term liabilities on the balance sheet.

Depreciation Expense

An accounting method used to allocate the cost of a tangible asset over its useful life.