The financial ratio days' sales in inventory is measured as:
A) Inventory turnover plus 365 days.
B) Inventory times 365 days.
C) Inventory plus cost of goods sold, divided by 365 days.
D) 365 days divided by inventory.
E) 365 days divided by inventory turnover.

Question

Quizplus · Accepted Answer

Days' sales in inventory is calculated by dividing 365 days by the inventory turnover ratio, which measures how many times a company's inventory is sold and replaced over a period.

The Financial Ratio Days' Sales in Inventory Is Measured As