Formula
to calculate inventory conversion ratio:
Inventory
Conversion Ratio = (sales x 0.5) / cost of sales.
Inventory
conversion ratio definition and explanation:
The
inventory conversion ratio indicates the extra amount of
borrowing that is usually available upon the inventory
being converted into receivables.
The inventory conversion ratio is included in the financial
statement ratio analysis spreadsheets highlighted in the
left column, which provide formulas, definitions,
calculation, charts and explanations of each ratio.
The inventory conversion ratio is listed in our turnover
ratios.
The inventory
conversion ratio and other ratios are key
to understanding financial statements. Our
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calculate, define and explain.
The inventory conversion
ratio may be included in our
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statement ratio analysis spreadsheet.
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