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?

Question

Business

Goodman

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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Answers (1)

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Nevaeh Villa · Answer 1

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