A business has opening and closing inventory of $2000 and $4000. The cost of sales is $250000. What is the inventory turnover in days?

Step (1) Average inventory

Average Inventory = (Opening Inventory + Closing Inventory)/2

Average Inventory = (2000+4000)/2=3000

 Step (2) Inventory turnover ratio

Inventory Turnover Ratio = (Average Inventory) / (Cost of sales)

Inventory Turnover Ratio =3000/250000=0.012

Step (3) days in inventory

Days in Inventory = 365/ (Inventory Turnover Ratio)

Days in Inventory =365/0.012=30416

Avg inventory = (4000+2000)/2 = 3000

Inventory turnover days = 3000*365/250000 = 4.38days (rounded to 4 days as stated by M. Islahi Iqbal)

(Dear barkat Ali, you did well initially but at last stage you mistakenly perform division instead of multiplication.)

Inventory TO ratio =,/(()/2)

                                 =,/

                                 =. times

Inventory TO days = days/.

                                 =4. days. 

I agree with the answer of Mr. Barkat Ali