Assume that a company’s Inventory Turnover is 15. What does that mean?  It takes about 15 days for inventory to move from the company to its customers. Receivables turn over 15 times per year. Inventories turn over 15 times per year. The average account receivable is collected about 15 days after the credit sale occurs.

Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
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Assume that a company’s Inventory Turnover is 15. What does that mean? 

It takes about 15 days for inventory to move from the company to its customers.

Receivables turn over 15 times per year.

Inventories turn over 15 times per year.

The average account receivable is collected about 15 days after the credit sale occurs.

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