The average days to sell inventory is computed by dividing
A) 365 days by the inventory turnover ratio.
B) the inventory turnover ratio by 365 days.
C) net sales by the inventory turnover ratio.
D) 365 days by cost of goods sold.

Question

Quizplus · Accepted Answer

The average days to sell inventory measures the number of days it takes for a company to sell its inventory. It is calculated by dividing 365 days by the inventory turnover ratio. This number represents the average number of days that inventory is held before it is sold. Therefore, the correct option is A.

The Average Days to Sell Inventory Is Computed by Dividing