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

Question

Business

Rigoberto Harrell

3 August, 08:05

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

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Answers (1)

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Madelynn · Answer 1

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