Question: When calculating days inventory, the average inventory level is compared with the cost of sales. When calculating days debtors, the average accounts receivable balance is

When calculating days inventory, the average inventory level is compared with the cost of sales. When calculating days debtors, the average accounts receivable balance is compared with the sales revenue. Explain why the former ratio uses cost of sales whereas the latter uses sales revenue, and why averages are used instead of year end figures?

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