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Sigma Limited has sales of $100 million, cost of goods sold of $60 million, assets of...

Sigma Limited has sales of $100 million, cost of goods sold of $60 million, assets of $120 million, accounts receivables of $20 million and inventory of $30 million. Calculate days' sales in inventory ratio.

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Answer #1

Days’ Sales in Inventory = (Inventory/Cost of Goods Sold) x 365

                                        = ($ 30,000,000/$ 60,000,000) x 365

                                        = 0.5 x 365 = 182.50

Days’ Sales in Inventory for Sigma Limited is 182.50

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