Days in inventory and asset turnover ratio

In this exercise, we will calculate the time it takes for a company to turn inventory into sales (days in inventory or DII ratio) and a ratio to calculate the efficiency of a company’s assets by seeing how the company uses its assets to generate sales (asset turnover ratio). The required formulas are:

\(DII = \frac{Average\,Inventory}{Total\,Cost\,of\,Goods\,Sold} \times Days\,in\,Financial\,Year\)

\(Total\,Average\,Assets = {(Opening\,Balance\,+\,Closing\,Balance)/2}\)

\(Asset\,Turnover = \frac{Sales}{Total\,Average\,Assets}\)

The following are preloaded:

Metric	Variable	Value
Total COGS	`cogs_tot`	4000
Average Inventory	`av_inv`	1900
Total Sales	`sales_tot`	10000
Opening balance Assets	`ob_assets`	2000
Closing balance Assets	`cb_assets`	7000

Calculate the DII ratio dii_ratio for T-Z and print the result.

Take Hint (-15 XP)

Exercise

Days in inventory and asset turnover ratio

Instructions 1/2