Respuesta :
a) the Inventory Turnover is 17.6 Times.
b)the Number of Days Sales in Inventory is 20.73 Days.
Inventory Turnover: What Is It?
The pace at which inventory stock is sold, used up, and replaced is known as inventory turnover. By dividing the cost of items by the average inventory for the same time period, the inventory turnover ratio is derived. A greater ratio often denotes good sales while a lower ratio generally denotes dismal sales.
Because it enables firms to plan out their financial movements, it is crucial.
What drives the turnover of inventory?
At the launch and expansion periods, demand may be great, which might result in high turnover rates. However, once the product enters the decline phase and approaches the end of its maturity period, demand will undoubtedly start to wane. will begin to slow down
a. Computation of Inventory Turnover Ratio:-
Turnover Ratio is calculated by dividing Cost of Goods Sold by Average Inventory.
Inventory Turnover Ratio= (Cost of Goods Sold/ Average Inventory)
=$(2569600/146000)
=17.6 times
So the Inventory Turnover is 17.6 Times.
b. Computation of Number of Days Sales in Inventory:-
Number of Days Sales in Inventory is calculated by dividing Days In Year by Inventory Turnover Ratio.
Number of Days Sales in Inventory=(Days In a Year/ Inventory Turnover Ratio)
=(365 Days/17.6 times)
=20.73 Days
So the Number of Days Sales in Inventory is 20.73 Days.
a) the Inventory Turnover is 17.6 Times.
b)the Number of Days Sales in Inventory is 20.73 Days.
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