The days' sales in inventory is one means of expressing the relationship between net sales and accounts receivable.

Question

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The days' sales in inventory measures the average number of days it takes for a company to turn its inventory into sales, and is not related to accounts receivable. The appropriate metric for expressing the relationship between net sales and accounts receivable is the days' sales outstanding (DSO) or accounts receivable turnover ratio.

The Days' Sales in Inventory Is One Means of Expressing