Question

the following information was available for Sheffield Corp. at December 31, 2022: beginning inventory $83000: ending inventory $142000; cost of goods sold $644000; and sales $800000. Sheffield inventory turnover ratio in 2022 wqas

Answer 1

Sheffield's inventory turnover ratio is 5.7 times.

What is the Inventory Turnover Ratio?

The inventory turnover ratio, also known as the stock turnover ratio, is a measure of how effectively inventory is maintained. The inventory turnover ratio formula equals the cost of products sold divided by total or average inventory to calculate how many times inventory is "turned" or sold within a given period. The ratio can be used to detect if there is an excess of inventory in relation to sales.

Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory

Here, COGS = 644000

Average Inventory = 83000 + 142000 / 2 = 112500

Now,

Inventory turnover ratio = 644000/112500

                                       = 5.7 times

Therefore final answer comes out to be 5.7 times.

For more, COGS questions, refer to the given link:

brainly.com/question/20581479

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