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

The financial ratio days' sales in inventory is measured by taking the number of days in a year (365) and dividing it by the inventory turnover ratio. This calculates the approximate number of days it takes for a company to sell its inventory.

The ﬁNancial Ratio Days' Sales in Inventory Is Measured As