Question

Easton Company had average inventory for the year of $640,000 and an inventory turnover ratio of 9.7. What was the company's Days Outstanding in Inventory. Assume a 365 day year. Round to one decimal place.

Answer 1

Answer:

37.63 days

Explanation:

Calculation for the company's Days Outstanding in Inventory

Using this formula

Numbers of Days Outstanding in Inventory=365/inventory turnover ratio

Let plug in the formula

Numbers of Days Outstanding in Inventory=(365/9.7)

Numbers of Days Outstanding in Inventory=37.63 days

Therefore the company's Days Outstanding in Inventory will be 37.63 days