The following data are pulled from Walsh Manufacturing’s 2016 annual report.

Assets
Raw material inventory $120,000
Work-in-process inventory $50,000
Finished goods inventory $400,000
Property, plant & equipment $500,000
Other assets $200,000
Total assets $1,270,000

Condensed Income Statement

Revenue $2,000,000
Cost of goods sold $650,000
Other expenses $1,000,000
Net income $400,000

Calculate:
i) Percent invested in inventory

ii) Inventory turnover, and

iii) Weeks of supply.

Solution
(i) Percent invested in inventory = (120,000+50,000+400,000)/1,270,000 = 44.88%
(ii) Inventory turnover = 650,000/(120,000+50,000+400,000) = 1.14
(ii) Weeks of supply = (120,000+50,000+400,000)/(650,000/52) = 45.6