By Adding the Number of Days That Inventory Is Held

question 6

Short Answer

By adding the number of days that inventory is held to the number of days that accounts receivable is outstanding an analyst can calculate the number of days of _____________________________________________ the firm requires.

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Definitions:

Cartons

Containers usually made of paperboard or cardboard used for storing and transporting goods.

Income Elasticity

The degree to which consumer demand for a product shifts following alterations in their financial earnings.

Inferior

A type of good for which demand decreases as the income of consumers increases.

Normal Good

A good whose demand increases as the income of consumers increases, and vice versa.