Question

At December 31 of a recent year, the following information (in thousands) was available for sunglasses manufacturer Oakley, Inc.: ending inventory $155,377; beginning inventory $119,035; cost of goods sold $349,114; and sales revenue $761,865

Calculate the inventory turnover ratio for Oakley, Inc. (Round answers to 2 decimal places, e.g. 5.12.)


Inventory turnover ratio times

Answer 1

143.444 days

Explanation:

For the computation of inventory turnover ratio first we need to find out the average inventory and inventory turnover which is shown below:-

Average inventory

= (Ending inventory + Beginning inventory) ÷ 2

= ($155,377 + $119,035) ÷ 2

= $137,206

Inventory Turnover = Cost of Goods Sold ÷ Average Inventory

= $349,114 ÷ $137,206

= 2.5444 times

Days in Inventory = 365 ÷ Inventory Turnover

= 365 ÷ 2.5444

= 143.444 days