If a company's inventory turnover ratio is 6.6 it takes them on average 55 days to sell their inventory.

Question

Quizplus · Accepted Answer

The inventory turnover ratio is calculated as the cost of goods sold divided by the average inventory. The formula for calculating the number of days it takes to sell inventory is 365 divided by the inventory turnover ratio.

So, in this case, 365/6.6 = 55.3 days. Therefore, it takes the company on average 55 days (rounded) to sell their inventory.

If a Company's Inventory Turnover Ratio Is 6