Inventory conversion period
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Inventory conversion period is the average length of time to convert materials into finished goods and then to sell them; calculated by dividing total inventory by cost of goods sold per day.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Inventory conversion period. The average length of time to convert materials into finished goods and then to sell them; calculated by dividing total inventory by cost of goods sold per day.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
