Period to Average Inventory Period = payment period /
average inventory period
period to average inventory period above 1:1 (100%)
indicates that the inventory is sold before it is paid
for (inventory does not need to be financed).
(the average inventory period is also known as the
inventory holding period)
inventory period, payment period
and payment period to average inventory period ratios
are 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 payment period to average inventory period ratio
is listed in our efficiency
|The payment period to
average inventory period ratio and other ratios are key
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The payment period to
average inventory period ratio may be included
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