Question

Nico corporation has cost of goods sold of $300,000 and inventory of $30,000, then the inventory turnover is ________ and the average age of inventory is ________.

Answer 1

Given: -
Cost of goods sold = $300,000
Inventory = $30,000
We need to find:
1) Inventory turnover
2) Average age of inventory
Solution:
1) Inventory turnover = Cost of Goods Sold/inventory = 300,000/30,000 Inventory turnover = 10.
2) Average age of Inventory = (Inventory/Cost of Goods Sold) * 365 Average age of Inventory = (30,000/300,000) * 365 = 36.5