The number of days' sales in inventory is one means of expressing the relationship between the cost of goods sold and inventory.

Question

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The number of days' sales in inventory is used to determine how long it takes for a company to sell its entire inventory, based on its cost of goods sold. It is calculated by dividing the average inventory by the cost of goods sold per day. Therefore, it is a measure of the relationship between cost of goods sold and inventory.

The Number of Days' Sales in Inventory Is One Means