Question

At December 31, 2022, the following information (in thousands) was available for Ayayai Inc.: ending inventory $22,000; beginning inventory $21,000; cost of goods sold $180,600, and sales revenue $420,000. Calculate the inventory turnover and days in inventory for Ayayai. (Round answers to 1 decimal places, e.g. 15.2. Use 365 days for calculation.) Inventory turnover enter inventory turnover in times times Days in inventory enter days in inventory days

Answer 1

Answer:

Inventory turnover in days = 43.59 days

Inventory turnover (No of times)=  8.37 times

Explanation:

Inventory turnover days is the average length of time it takes a business to sell its inventory before replacement.

Inventory turnover in days

= Average inventory /Cost of goods sold × 365 days

Average inventory = (Opening Inventory + closing inventory)/2

Average inventory

= (21,000 + 22,000)/2

= 21,500

Inventory turnover in days

(21,500/180,600) × 365 days

=43.597 days

Inventory turnover (No of times )

= Cost of goods sold/Average inventory

=  180,600/21,500

= 8.37 times