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Mario's Home Systems has sales of $2,770, costs of goods sold of $2,110, inventory of $494, and accounts receivable of $425. How many days, on average, does it take Mario's to sell its inventory?
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Mario's Home Systems has sales of $2,770, costs of goods sold of $2,110, inventory of $494, and accounts receivable of $425. How many days, on average, does it take Mario's to sell its inventory?

User Niels Lucas
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1 Answer

2 votes

Answer:

D) 85.45 days

Step-by-step explanation:

Days sales in inventory is calculated by dividing total inventory by COGS, and then multiplying that by 365 days:

(inventory / COGS) x 365 = ($494 / $2,110) x 365 = 85.45

Days sales in inventory measures the average number of days that it takes for a company’s inventory to be realized into sales within the year.

User Gurmeet
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