This form allows you to quickly convert your inventory turnover ratio to the days' sales in inventory. You will see on average the number of days' sales that are sitting in inventory. Too many days' sales in inventory can lead to items becoming obsolete and may also prevent you from meeting the payroll or paying bills as they come due.
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For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.
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