Question

Marian Company reported the following items for the month of​ July: Sales revenue $ 473 comma 300 Cost of goods sold $ 300 comma 000 Beginning inventory $ 64 comma 400 Ending inventory $ 74 comma 200 Inventory turnover​ is: (Round your final answer to two decimal​ places.)

Answer 1

Answer:

4.33.

Explanation:

Inventory turnover is a ratio that tells us the number of times a company sells and replaces its inventory. It is calculated by taking Cost of Goods Sold for a period and dividing it by Average Inventory [(Opening + Ending) / 2].

⇒ 300,000 / [(64,400 + 74,200) / 2] = 300,000 / 69,300 = 4.33.

It means that Marian Company sold its inventory 4.33 times during the Year.