Asked by Shyla Schneider on May 28, 2024
Verified
Days in inventory is calculated by dividing
A) the inventory turnover by 365 days.
B) average inventory by 365 days.
C) 365 days by the inventory turnover.
D) 365 days by average inventory.
Days In Inventory
Days in inventory is a financial metric indicating how long it takes for a company to turn its inventory into sales.
Inventory Turnover
A ratio showing how many times a company's inventory is sold and replaced over a period.
- Apply the concept of days in inventory to assess inventory management efficiency.
Verified Answer
AK
April KennyMay 29, 2024
Final Answer :
C
Explanation :
Days in inventory is calculated by dividing 365 days by the inventory turnover. This gives the average number of days items are in inventory before being sold.
Learning Objectives
- Apply the concept of days in inventory to assess inventory management efficiency.