Re-Up Enterprises has sales of $926,355, costs of goods sold of $613,500, inventory of $189,880, and accounts receivable of $78,580. How many days, on average, does it take the firm to sell its inventory assuming that all sales are on credit?

Question

Business

Audrey

7 June, 22:49

Re-Up Enterprises has sales of $926,355, costs of goods sold of $613,500, inventory of $189,880, and accounts receivable of $78,580. How many days, on average, does it take the firm to sell its inventory assuming that all sales are on credit?

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Answers (1)

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Marguerite · Answer 1

=112.785

Explanation:

Average days in inventory is financial ratio that shows the average number of days a company takes to turn its inventory.

The formula for calculating the average days in inventory is as below.

Days in inventory = Average inventory / cost of goods sold x 365

for Re-UP Enterprises: average inventory = $189,880

cost of goods sold = $613,500,

Days in inventory

= $189,880/613,000 x 365

=0.309 X 365

=112.785