Days' Sales in Inventory

Multiple Choice

Days' sales in inventory:

A) Is a ratio that tells us how much inventory a firm has on hand in terms of days' sales.
B) Is the number of days we can sell from inventory if no new items are purchased.
C) Is a ratio that estimates how many days it will take to convert inventory on hand to accounts receivable or cash.
D) All of these answers are correct.
E) Is a ratio that estimates how many days it will take to convert inventory on hand to accounts receivable or cash and is a ratio that tells us how much inventory a firm has on hand in terms of days' sales.