Page 12 of 12 LO6: Use inventory turnover and days' sales in inventory to evaluate business performance Inventory turnover = Cost of goods sold / Average merchandise Inventory Average merchandise inventory = (Beginning merchandise inventory + Ending merchandise inventory) / 2 Days' sales in inventory = 365 days / Inventory turnover Problem 8: Broadway Communications reported the following figures in its annual financial statements: Cost of Goods Sold $ 18,400 Beginning Merchandise Inventory 560 Ending Merchandise Inventory 450 Compute the rate of inventory turnover and days' sales in inventory for Broadway Communications. (Round to two decimal places.)