yospaghetti

DOH = Days of Inventory on hand

= 365/Inventory Turnover

= 365/ (COGS/Avg Inventory)

Perpetual counting system is an inventory cost flow method. Instead of valuin ginventory at year end (under FIFO or LIFO), it is constantly updated.

Cash Conversion cycle is = Days Sales Outstanding + Days inventory on hand - Days of payables

=365/AR Turnover + 365/Inventory Durnover - 365/Payables turnover

= 365/ (sales/avg receivables) + 365/(COGS/avg inventory) - 365/(purchases/avg payables).


Going back to LI, does anyone remember the difference between Cossh conversion and operating cycle? is operating cycle just DSO + DOH?