The firm's inventory conversion period (measured in days) is equal to its average inventory divided by its ____.

Question

Quizplus · Accepted Answer

The inventory conversion period is calculated as the days it takes to sell inventory. It can be calculated by dividing the average inventory by the cost of sales per day. Hence, the correct formula is cost of sales divided by 365 days. Option C is the only choice that provides this formula, hence it is the best choice.

The Firm's Inventory Conversion Period (Measured in Days) Is Equal