Eagle Sports had sales in 2018 of 1750000 cost of sales of 9

Eagle Sports had sales in 2018 of $1,750,000, cost of sales of $900,000, average accounts receivable of $600,000 and average inventory of $325,000. How many days, on average, does it take Eagle Sports to sell its inventory assuming that all sales are on credit? (Assume 365-day year; Show calculation)

Solution

How many days, on average, does it take Eagle Sports to sell its inventory assuming that all sales are on credit?

Calculation of Days Sales in inventory:

Days Sales in inventory = (Average inventory / Cost of Goods sold)*365

= (325000 / 900000)*365

=131.81 Days