Question

Toys "r" us had cost of goods sold of $9,421 million, ending inventory of $2,089 million, and average inventory of $1,965 million. its days' sales in inventory equals:

Answer 1

We can calculate for the inventory turnover using the formula:

 
Inventory Turnover= Cost of Goods Sold/ Average Inventory 

 

We are given that,

Cost of Goods Sold = $9,421 million

Average Inventory = $1,965 million

 

Using the formula:

Inventory Turnover = 9,421/1,965

Inventory Turnover = 4.79