FIFO LIFO Weighted Averageooo Inventory Turnover and Number of Days Sales in Inv
ID: 2577389 • Letter: F
Question
FIFO LIFO Weighted Averageooo Inventory Turnover and Number of Days Sales in Inventory 2015 2016 $4,504,500 $788,000 $3,715,200 Cost of Merchandise Sold: Inventories Beginning of the Year 760,000 $ 788,000 End of the Year a) Determine the Inventory Turnover for 2016 and 2015 b) Determine the Number of Days Sales in Inventory for 2016 and 2015. Use 365 $850,000 5.5 and 3 days and round to the nearest one decimal place 169.0 Inventory Turnover 2016 Inventory Turnover 2015 12341 Days Sales In Inventory 2016 Days Sales in Inventory 2015 c) What does this analysis tell you Th s alalys tells ha Comp any had a ao
Explanation / Answer
b)Inventory turnover 2016 :5.5
Inventory turnover for 2015 : 4.8
Days sales in inventory : 365/ Inventory turnover
2016 : 365/5.5 = 66.4days
2015 : 365 /4.8 = 76. days
c)The days sales in inventory has decreased from 76 to 66.4 days which means company inventory turnover ratio has improved and its inventory is rotating faster .
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