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Sir when calculating Inventory turnover period. If they give only closing inventory. What can I do? How can I take average inventory and tell me the equation. Please
If all you are given is closing inventory then you use closing inventory.
(Most times in fact you have to use closing inventory because most times you do not have enough information to calculate average inventory)
Its something to keep in mind when undertaking ratio analysis.If closing figures are used and these are higher or lower than they generally would be it can give misleading impression when undertaking analysis and comparison of these ratios if this is not taken into consideration.
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