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Average Inventory Formula (Beginning Inventory + Ending Inventory) ÷ 2 = Average Inventory Average Inventory Sample $30,000 + $25,000 ÷ 2 = $27,500 COGS Formula Beginning Inventory + Purchases During Period – Ending Inventory = COGS COGS Example $30,000 + $90,000 – $25,000 = $95,000 Days Sales in Inventory Formula Now that you’ve determined the values for Average Inventory and COGS, it’s time to calculate DSI

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