Question

Tater and Pepper Corp. reported sales for 2018 of $43 million. Tater and Pepper listed $7.6 million of inventory on its balance sheet. How many days did Tater and Pepper’s inventory stay on the premises?

Answer 1

Answer:

Days in sales inventory= 64.511 days

Explanation:

Inventory turnover rate is defined as the number of times a company sells its inventory within a give period usually a year. The higher the number of turnovers the higher sales volume and profit.

Days inventory stayed on premisses is the total number of days in a year where the inventory remained on the premises without being sold.

To calculate the number of days Tater and Pepper’s inventory stay on the premises we use the formula

Days sales in inventory= (value of inventory)/(sales)*365

Days sales in inventory= (7.6 million/43 million)*365

Days in sales inventory= 64.511 days