answersLogoWhite

0

Generally inventory turnover period is calculated as: Sales/Inventory Also by, Cost of Goods Sold/ Average Inventory

User Avatar

Wiki User

17y ago

What else can I help you with?

Related Questions

How do I calculate inventory turnover?

To calculate inventory turnover, divide the cost of goods sold (COGS) by the average inventory for a specific period. The formula is: Inventory Turnover = COGS / Average Inventory. Average inventory can be calculated by adding the beginning inventory and ending inventory for the period and dividing by two. A higher turnover rate indicates efficient inventory management, while a lower rate may suggest overstocking or weak sales.


How can you calculate number of days in selling period?

# of days in the business year divided by the inventory turnover.


If a company has an inventory turnover rate of 7 and an AR turnover rate of 5 and assuming there is 365 days in a year what is the period of time required to convert its inventory into cash?

To calculate the period of time required to convert inventory into cash, you can use the formula: Days in Inventory = 365 days / Inventory Turnover Rate. With an inventory turnover rate of 7, this results in approximately 52.14 days (365 / 7). Therefore, it takes about 52 days to convert the inventory into cash.


How do you calculate turnover of financial statement?

Turnover in a financial statement typically refers to revenue or sales generated by a company during a specific period. To calculate turnover, you sum all the sales transactions within that period, excluding returns, allowances, and discounts. This figure can be found on the income statement, often labeled as "total revenue" or "net sales." Additionally, turnover can also refer to inventory turnover, calculated by dividing the cost of goods sold (COGS) by the average inventory during the period.


Is inventory turnover the same as inventory conversion period?

Inventory conversion period tells that how many days it is require to convert inventory to finished goods while inventory turnover tell in number of times that how many times inventory turned into finished goods in one fiscal year.


How to calculate average change IN INVENTORY?

You calculate average change in inventory by dividing the turnover by how many times it has turned over. The number you get is the average.


How do you calculate stock turnover period?

Stock turnover period = Closing stock x 365 / cost of sales


Is Increasing in turnover is good or bad?

An increase in inventory turnover is good. This means that over a certain period of time, the amount of times the inventory of a company was sold and replaced has increased.


When calculating the inventory turnover at cost the first step is to calculate the?

Cost of goods sold


When calculation the inventory turnover at cost the first step is to calculate the?

Cost of goods sold


When calculating the inventory turnover at cost the first step is to calculate the ----?

Cost of goods sold


When calculating the inventory turnover at cost the first step is to calculate the -?

Cost of goods sold