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To: D. Swiss who wrote (60175)8/21/1998 4:35:00 PM
From: Chuzzlewit  Read Replies (1) | Respond to of 176387
 
Hi Drew,

Yes, and no. What you are really interested is how many days your current inventory is capable of supporting sales. But you're mixing gross profit into the equation when you use revenues as the denominator. A sale is what you receive for the inventory -- that is, it includes a markup. So using sales instead of cost of sales gives a misleading number. I hope this is clear.

TTFN,
CTC


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