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

Name: Ellemoor Inc.has increased its inventory turnover ratio from 12 to 18.By how many days has it reduced the operating cycle?
Brand: Quizplus
Rating: 4.9 (56 reviews)

Question

Quizplus · Accepted Answer

The inventory turnover ratio increase from 12 to 18 means the company is selling its inventory faster. The operating cycle is reduced by the difference in days calculated as (365/12) - (365/18) = 10 days.