Ratios

Question 1

Raw Materials Holding Period=

Answer 1

Average Inventory of Raw Materials/Annual Usage (purchases) x365

Question 2

Average Production Period=

Answer 2

Average Inventory of WIP/Annual Cost of Sales x 365

Question 3

Average Holding Period=

Answer 3

Average Inventory of Finished Goods/Annual Cost of Sales x 365

Question 4

Average Receivables Days=

Answer 4

Average Receivables/Annual Sales Revenue x 365

Question 5

Average Payable Payment Period=

Answer 5

Average payables/Average Purchases (or Cost of Sales) x365