Suppose at December 31 of a recent year, the following information (in thousands

Question

Suppose at December 31 of a recent year, the following information (in thousands) was available for sunglasses manufacturer Oakley Inc.: ending inventory $147,914; beginning inventory $118,052; cost of goods sold $355,848 and sales revenue $816,017.

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Suppose at December 31 of a recent year, the following information (in thousands) was available for sunglasses manufacturer Oakley Inc.: ending inventory $147,914; beginning inventory $118,052; cost of goods sold $355,848 and sales revenue $816,017.

Explanation / Answer

Inventory Turnover Ratio=Cost of goods sold/Average inventory)

=$355848/[(118052+147914)/2]

=2.68 times

Days in inventory=365/Inventory turnover ratio

=365/2.68

=136.4 days

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