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Inventory turnover

This topic has 1 reply, 2 voices, and was last updated 3 years ago by John Moffat.

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January 24, 2021 at 7:35 am #607720
applessauce
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You have been advised that a business has an inventory turnover of 8.49
What is the average number of days that inventory is retained in the business prior to the sale?
Is 8.49 days the answer itself because the inventory stays for 8.49 days before being sold????
January 24, 2021 at 10:41 am #607750
John Moffat
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Inventory turnover is purchases / inventory, and is not the same as the inventory days.
If the inventory turnover is 8.49, then assuming 365 days in a year it means that the inventory days are 365/8.49 = 43 days.
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