Based on the following information, how many days of supply of inventory is the firm holding (assume 250 days of operation per year)? Interpret your answer if the industry average inventory days' supply is 30 days.

Sales $8,300,000,

Cost of goods sold $7,200,000,

Gross profit $1,100,000, Overhead Cost $600,000,

Net Profit $500,000,

Total Inventory $2,600,000,

Fixed assets $3,000,000,

Long-term debt $2,700,000.

Hint:

Inventory turnover (IT) = Cost of goods sold /Average inventory value Cost of goods sold/day (CGS/D)

Cost of goods sold value/Operating days per year Inventory days' supply (IDS) = Ave. total inventory /Cost of goods sold per day.

Inventory days' supply (IDS) = Ave. total inventory /Cost of goods sold per day Is the inventory days' supply above the industry average? If yes, what does it indicate?