Answer:
Inventory turnover ratio= 4.8
Explanation:
Giving the following information:
Theta Corporation has beginning and ending inventories of $40,000 and $60,000, respectively. The cost of goods sold for the year is $240,000.
The inventory turnover is the number of times the inventory gets replaced in a period.
The formula to calculate the inventory turnover ratio, we need to use the following formula:
Inventory turnover ratio= cost of goods sold/ average inventory
Average inventory= (beginning inventory + ending inventory)/2
Average inventory= (40,000 + 60,000)/2= 50,000
Inventory turnover ratio= 240,000/50,000= 4.8
