The average days to sell inventory ratio is calculated as
A) average inventory divided by inventory turnover.
B) inventory turnover divided by cost of goods sold.
C) inventory turnover divided by 365 days.
D) 365 days divided by inventory turnover.

Question

Quizplus · Accepted Answer

The average days to sell inventory ratio, also known as days inventory outstanding (DIO), measures how quickly a company can turn its inventory into sales. It is calculated by dividing 365 days by the inventory turnover ratio.

The Average Days to Sell Inventory Ratio Is Calculated as