We are studying financial ratios in managerial accounting. Jerry Flint of Forbes takes a look at
auto inventories. If one divides inventory turnover into 365, one gets the number of days a car sits on the lot before it sells, a very important number in the auto business.
Flint reveals why GM and other Detroit auto makers have such long days on lot, versus the Japanese auto makers. The finance guys got it all wrong, just because you have to pay the workers it does not make sense to build cars that won't sell.
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