how is inventory turnover related to days sales in inventory/course hero

Check all that apply The longer the inventory period, the higher the turnover rate. The lower the turnover rate, the fewer days' sales that are held in inventory. The shorter the inventory period, the higher the turnover rate The lower the turnover rate, the more days' sales that are held in inventory.

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How does inventory turnover change during the year?

First In, First Out Ending Inventory $ 105,600 Cost of goods Sold $ 227,200 b. Last-In, First-Out Ending Inventory $ Cost of Goods Sold $ 0x c. Weighted Average Inventory Turnover and Days' Sales in Inventory The Southern Corporation installed a new inventory management system at the beginning of 2018. Shown below are data from the company's accounting records as reported …

Can ABC save $1 million by double its inventory turnover?

Apr 23, 2020 · Determine the inventory turnover and the number of days' sales in inventory (use 365 days and round to the nearest day) for the three companies. Round all interim calculations to one decimal place. For days' sales in inventory, round final answers to the nearest day, and for inventory turnover, round to one decimal place.

What is the difference between low turnover&high turnover?

Mar 12, 2020 · See Page 1. Inventory Turnover Days Sales In Inventory $ $ Days’ Sales In Inventory Choose Numerator: / Choose Denominator: x Days = Days’ Sales In Inventory Ending inventory / Cost of goods sold x 365 = Days’ sales in inventory 8,000 / 40,000 x = days 365 73.0 F F Explanation: a. Inventory Turnover: $40,000 = 8.0 times ($2,000 + $8,000)/2 b.

What if the ending inventory figure is not representative of inventory?

This preview shows page 162 - 165 out of 448 pages. Topic: 06-18 Inventory Turnover and Days' Sales in Inventory. Chapter 06 - Inventory Costing and Valuation 6-19 70. Toys "R" had cost of goods sold of $6,900 million. Its ending inventory was $2,000 million. Therefore, its days' sales in inventory was 90 days.

How is inventory turnover related to days?

What Is Inventory Turnover? Inventory turnover is a financial ratio showing how many times a company has sold and replaced inventory during a given period. A company can then divide the days in the period by the inventory turnover formula to calculate the days it takes to sell the inventory on hand.

How is inventory related to days sales in inventory?

The calculation of the days' sales in inventory is: the number of days in a year (365 or 360 days) divided by the inventory turnover ratio.

How does the inventory turnover affect Days sales of inventory?

Key Takeaways Inventory turnover is the rate that inventory stock is sold, or used, and replaced. The inventory turnover ratio is calculated by dividing the cost of goods by average inventory for the same period. A higher ratio tends to point to strong sales and a lower one to weak sales.Nov 16, 2020

What does it mean when inventory turnover days increased?

The higher the inventory turnover, the better, since high inventory turnover typically means a company is selling goods quickly, and there is considerable demand for their products. Low inventory turnover, on the other hand, would likely indicate weaker sales and declining demand for a company's products.

How is inventory turnover related to days sales in inventory select all that apply?

How is inventory turnover related to days' sales in inventory? - The lower the turnover rate, the more days' sales that are held in inventory.

What is days of sales in inventory?

Days' sales in inventory (DSI) indicates the average time required for a company to convert its inventory into sales.Jan 22, 2022

Is it possible to have a high inventory turnover and a high Days sales in inventory?

If so, then inventory days is also related to the inventory turnover ratio. For instance, when the inventory turnover is low, the days' sales in inventory will be high. When the inventory turnover is high, the days' sales in inventory will be low.