Question

If Barry bees, Inc.'s days to sell equals 73 days based on a 365-day year, then its inventory turnover ratio equals _____ times?

Answer 1

To calculate the inventory turnover ratio for Barry Bees, Inc., divide 365 days by the given days to sell, 73 days, which results in a turnover ratio of 5 times. This ratio indicates how many times the company's inventory is sold and replaced in a year.

Step-by-step explanation:

If Barry Bees, Inc.'s days to sell equals 73 days based on a 365-day year, we can calculate its inventory turnover ratio by dividing the number of days in a year by the days to sell inventory. The formula for inventory turnover ratio is Total Sales divided by Average Inventory, which is closely related to the days to sell.

The inventory turnover ratio can be found using the formula:

Inventory Turnover Ratio = 365 / Days to Sell

Hence, Inventory Turnover Ratio = 365 / 73 = 5 times (rounded to the nearest whole number).

This ratio provides insights into how many times a company has sold and replaced its inventory during a given period, which is a critical aspect of business efficiency. A high turnover indicates high sales or effective inventory management, while a low ratio may suggest overstocking or challenges in product sales.