duration in Activity ratios correct, standard, practice, 180, 365

kim226

Number of days within Activity Ratios use 365 days as a standard practice for duration.

However, if the operating cycle is less than 365 days- would it be appropriate to substitue the new duration?

i.e. if the operating cycle is 180 days THEN

days of inventory on hand = 365/inventory turnover

WOULD BE CHANGED TO

days of inventory on hand = 180/inventory turnover

Is this correct.