The formulas used in the calculations are:
\[ \text{Average Inventory} = \frac{\text{Beginning Inventory} + \text{Ending Inventory}}{2} \]
\[ \text{Inventory Turnover} = \frac{\text{COGS}}{\text{Average Inventory}} \]
\[ \text{Inventory Days} = \frac{365}{\text{Inventory Turnover}} \]
This calculator computes the Inventory Turnover and Inventory Days based on the input values of beginning inventory, ending inventory, and cost of goods sold (COGS). Inventory Turnover measures how efficiently a company manages its inventory, while Inventory Days indicates the average time it takes to sell the inventory.
Let's assume the following:
Calculate the average inventory:
\[ \text{Average Inventory} = \frac{100,000 + 150,000}{2} = 125,000 \]
Calculate the inventory turnover:
\[ \text{Inventory Turnover} = \frac{600,000}{125,000} = 4.8 \]
Calculate the inventory days:
\[ \text{Inventory Days} = \frac{365}{4.8} \approx 76.04 \text{ days} \]
Therefore, the Inventory Turnover is 4.8, and the Inventory Days is approximately 76.04 days.
