Question

Recall the formula for figuring days' sales in inventory.

A) Inventory turnover ratio
B) Cost of goods sold
C) Average days to sell inventory
D) Days' sales outstanding

Answer 1

The formula for figuring days' sales in inventory is the average days to sell inventory.

Step-by-step explanation:

The correct answer for the formula that helps figure out the days' sales in inventory is Option C) Average days to sell inventory. The average days to sell inventory measures the average number of days it takes for a company to sell its inventory. It is calculated by dividing the average inventory by the cost of goods sold and multiplying by 365 days. This ratio provides insight into how quickly a company is able to turn its inventory into sales.