In its 2015 annual report, Gap Inc. reported inventory of $1,889 million on Janu
ID: 2513220 • Letter: I
Question
In its 2015 annual report, Gap Inc. reported inventory of $1,889 million on January 31, 2015, and $1,928 million on February 1, 2014, cost of goods sold of $10,146 million for 2015, and net sales of $16,435 million. Compute Gap's inventory turnover for the fiscal year 2015. (Round answer to 2 decimal places, e.g. 7.62.) Inventory turnover times LINK TO TEXT Compute Gap's average days to sell inventory for the fiscal year 2015. (Round answer to 1 decimal place, e.g. 7.6.) Average days to sell inventory daysExplanation / Answer
a. inventory turnover = cost of goods sold / average inventory
here,
cost of goods sold= $10,146 million
average inventory = ($1,889 million + $1,928 million) / 2
=>$1,908.5 million.
inventory turnover = $10,146 million / $1,908.5 million
=>5.32times.................(rounded to two decimals).
b.average days to sell inventory
=> number of days in period / inventory turnover
=>365 days / 5.32
=>68.6days.........(rounded to one decimal)