Beckenworth had cost of goods sold of $10,721 million, ending inventory of $3,389 million, and average inventory of $2,095 million. Its days' sales in inventory equals:(Use 365 days a year.)

a. 0.3 days.

b. 115.4 days.

c. 44.0 days.

d. 43.8 days.

e. 71.3 days.

b. 115.4 days.

Explanation:

Days' sales in inventory is a financial ratio that shows the number of days it took a company to sell its inventory during a given period. It shows how quickly a company is able to convert inventory to cash.

Days' sales in inventory may be computed by dividing the number of days in the given period by the inventory turnover ratio. Where the inventory turnover ratio is the ratio of cost of sales to ending inventory.

Days' sales in inventory

= 365/($10,721 million/$3,389 million)

= 115.37 days.