Inventory turnover in days indicates:
A) the average number of days to purchase inventory.
B) the average number of days to convert inventory into cash.
C) the average number of days taken to sell the inventory.
D) the overall earning power of the inventory.

Question

Quizplus · Accepted Answer

Inventory turnover in days indicates the average number of days taken to sell the inventory. It is calculated by dividing the total number of days in a period by the inventory turnover ratio. This ratio represents how many times a company sells and replaces its inventory in a given period. Hence, option C is the correct answer. Options A, B, and D do not accurately describe inventory turnover in days.

Inventory Turnover in Days Indicates