Brief Exercise 199 At December 31, 2022, the following information (in thousands) was available for Ayayai Inc.: ending inventory $22,200; beginning inventory $21,900; cost of goods sold $220,500, and sales revenue $435,000. Calculate the inventory turnover and days in inventory for Ayayai. (Round answers to 1 decimal places, e. g. 15.2. Use 365 days for calculation.)

Inventory Turnover = 10.

Days in Inventory = 36.5.

Explanation:

Inventory Turnover Ratio

It is calculating by taking Cost of Goods Sold, and dividing it by Average Inventory.

whereas

Average Inventory = (Beginning Inventory + Ending Inventory) / 2

                                              Putting values:

⇒ Average Inventory = (21,900 + 22,200) / 2 = $22,050.

Now Take the value of Cost of Goods Sold and divide it by Average Inventory to get Inventory Turnover:

⇒ Inventory Turnover = 220,500 / 22,050 = 10.

Days in Inventory

Take the Average Inventory and Divide it by Cost of Goods Sold. Now Multiply the result with number of days.

⇒ Days in Inventory = (22,050 / 220,500) * (365) = 36.5.

Note: Some Analysts measure the Inventory Turnover by taking Sales and Dividing it by Average inventory.

Thanks!

trade allows people to focus on one kind of production and trade for their other needs. ( d.)

if you use only 25 for your entertainment and only 200 for the groceries that you really need and take out the 50 per month for the computer then that should be enough