Question

The financial statements of Walgreen Co. reported the following information (in millions): Year 2 Year 1 Cost of sales $51,098 $51,291 Inventories, net 6,852 7,036 The average inventory days outstanding in year 2 is: Group of answer choices 55.6 days 33.9 days 21.5 days 49.6 days

Answer 1

49.6 days

Step-by-step explanation:

The average inventory days outstanding is an example of an activity ratio. Activity ratios measures the efficiency with which comapnies carry out their daily tasks

The average inventory days outstanding = number of days in a period / inventory turnover

inventory turnover = cost of goods sold / average inventory

Average inventory = (6,852 + 7,036 ) / 2 = 6944

$51,098/ 6944 = 7.365

365/ 7.365= 49.6 days