Briefly explain the concept behind inventory turnover and how management uses it to measure their performance in managing inventory/cash. Explain how the when measuring inventory across different companies what area of caution need to be considered when making this comparison
Secondly, explain why inventory as an item of working capital is only an estimate of the real cash flow that will be derived from inventory in the normal operating
Third, define the operating cycle from a cash management perspective, ie how do we measure "cash to cash" from inventory. Hint days in inventory is only one piece of this cycle.