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Hai,
Im kind of confused on how to calculate the inventory days.
The question goes like this :
Receivable days : 58
Payable days : 45
Inventory turnover : 10 times per annum
NCA days : 38What is the length of the cash operating cycle?
Assuming that there are 365 days in a year (although questions usually tell you how many days to assume in a year) then if the inventory turns over 10 times in a year, it means there is enough inventory to last 365/10 = 36.5 days, which is the inventory days.
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