calculate days of inventoryfrom the data provided

Question

Calculate days of inventory:

From the data provided in table 1 and 2, calculate days of inventory.

Solution

Average Inventory Investment = (Last year inventory + Current year inventory) /2

= ((650 + 175) + (550 + 125)) /2= 750

From Eq. Of Days of Inventory

Days of Inventory = 750 × 365/3600 = 76 days