A firm's inventory period can be estimated by the ratio of inventory to daily output.

Name: A firm's inventory period can be estimated by the ratio of inventory to daily output.
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The inventory period can be estimated by dividing the inventory balance by the average daily cost of goods sold. However, the ratio of inventory to daily output can be used to calculate the inventory turnover ratio, which measures how many times a company has sold and replaced its inventory over a given period.

A Firm's Inventory Period Can Be Estimated by the Ratio