Answer:
Inventory turnover days = 29.2 days
Explanation:
Inventory turnover is the average length of time it takes the item of stock to be sold and replaced. It can be measured in days or the number of times.
it can be calculated in days or in number of times
Inventory turnover number of times = cost of goods sold/average inventory
Inventory turnover days = (Average inventory /cost of good sold)× 365 days
It shorter the Inventory turnover in days the better. We will use the days formula.
Note average inventory = (opening inventory + closing inventory)/2
However, the average inventory concept will not be applicable in this question because the opening inventory figure is not given. Hence, we will use the closing inventory figure to represent the average inventory
Inventory turnover days = 2,000,000/25,000,000× 365 days= 29.2
Inventory turnover days = 29.2 days
