http://www.investopedia.com/terms/i/inventoryturnover.asp I believe the one we learned at level I, and for purposes of this exam, is the COGS/avg inventory correct?
correct- COGS/ave inventory
i think so, the higher the figure the more efficient the company is.
what about DSO? this is for days of inventory outstanding. does anyone remember the formula? I believe its 360 / Inv turnover right?
I think we should use 365 day-count for both DSO and DOH, one for the receivables and one for the inventory… M.
use 365 if you have schweser book 2 check page 297. all fomulas are there
using 360 vs 365 drive me crazy … when to use which? At one point, I was keeping track, but then in one of Schweser seminars, they recommended to just go w/ the 360 rule given that the difference from using either is pretty insignificant. Any thoughts?
I remember reading a post on this stating that we should use 360 when LIBOR is involved, 365 otherwise… M.
i actually was wondering this yesterday and i went thru every single derivates page to check my “theory” that always use 365 unless LIBOR is involved, in which case you use 360 (swaps, fra’s, eurodollar futures). i was right.
the show NY Wrote: ------------------------------------------------------- > i actually was wondering this yesterday and i went > thru every single derivates page to check my > “theory” that always use 365 unless LIBOR is > involved, in which case you use 360 (swaps, fra’s, > eurodollar futures). i was right. Interesting … thanks.