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14 October, 18:10

Mario's Home Systems has sales of $2,880, costs of goods sold of $2,220, inventory of $516, and accounts receivable of $436. How many days, on average, does it take Mario's to sell its inventory?

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  1. 14 October, 21:11
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    84.84 days

    Explanation:

    Data provided in the question:

    Sales = $2,880

    costs of goods sold = $2,220

    Inventory = $51

    Accounts receivable = $436

    Now,

    Time taken to sell inventory = 365 : (Inventory Turnover Ratio)

    also,

    Inventory Turnover Ratio = [ Cost of goods sold ] : [ Average inventory ]

    = $2,220 : $516

    = 4.3023

    Therefore,

    Time taken to sell inventory = 365 : 4.3023

    = 84.84 days
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