You are a manager for a medium sized company and have been given the following information:
Your inventory turnover is 6
You have an average accounts receivable of $200,000 and sales of $1,200,000
Your accounts payable is $100,000 and your cost of goods sold is $800,000.
What is your inventory period?
What is your operating cycle?
What is your cash conversion cycle?
What does this tell you?
Where can you improve?