The formula for the average inventory turnover period in days is:

Question

Quizplus · Accepted Answer

The formula for the average inventory turnover period in days is (Average inventory held/Cost of sales) × 365. This formula calculates the average number of days it takes for a company to sell its inventory. It takes into account both the average inventory held and the cost of sales, providing a more comprehensive view of inventory turnover. Option B only calculates the ratio of inventory to sales, and option C calculates the ratio of cost of sales to inventory, which is not what the question is asking for. Option D is incorrect as there is a formula for the average inventory turnover period.

The Formula for the Average Inventory Turnover Period in Days