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Inventory holding period

This topic has 1 reply, 2 voices, and was last updated 6 years ago by John Moffat.

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October 9, 2018 at 4:42 am #476897
nzrn89
Participant
- Topics: 37
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Hi
I would like to ask for inventory holding period, if the question states to calculate for the year ended,
do we use average inventory or closing inventory / COGS x 356 days
In case we have sufficient info to know the closing and opening inventory.
Thank you.
And should we use average inventory only when the question states so?
October 9, 2018 at 8:07 am #476913
John Moffat
Keymaster
- Topics: 57
- Replies: 54458
If you do have opening and closing inventory (for both years if you are comparing two years) then we use the average inventory as you have stated.
If there is not enough information, then we just use the closing inventory in the calculation.
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