ViteS Equipment Company has increased its inventory turnover ratio from 12 to 18. By how many days has it reduced the operating cycle?

Question

Quizplus · Accepted Answer

The inventory turnover ratio increase from 12 to 18 indicates that inventory is being turned over more frequently. The operating cycle is reduced by the difference in days it takes to turn over inventory, calculated as (365/12) - (365/18) = 10 days.

ViteS Equipment Company Has Increased Its Inventory Turnover Ratio from 12