Milesofstyles, I have looked into this since the question was asked and I did not know the answer, what I have found out is inventory turnover can be found by sales divided by inventory in CADES case using year end 1997 numbers that would be
55,803,761 / 13,798,967 = 4.04 times a year*
The Company "turns its inventory over" 4.04 times a year.
*The real or physical turnover is found by dividing inventory, which is carried at cost, into "cost of sales." in this case the turnover would be 3.15 times a year.
43,480,981 / 13,798,967 = 3.15 times a year.
Number of days average account receivable is outstanding can be found by Accounts and notes receivable divided by net daily sales
14,741,891 / ( 55,803,761 / 365 ) = 96 days
This is assuming I did this correctly. The formulas we both use are similar but they are different. This is new to me so I do have more to learn. Thanks for the information and your input.
Joe |
