Answer:
8.7
Explanation:
Sales = $93,000,000
Gross profit margin = 45%
Gross profit= 45%*93,000,000 = $41,850,000
Gross profit = sales - cost of goods sold
Cost of goods sold = Gross profit + sales = 41,850,000 + 95,000,000 = $53,150,000
Inventory turnover = cost of goods sold/inventory
Inventory = $52,250,000/6.3= $8,436,508
Given:
Total Inventory = $8,436,508
Unsalable items = $2,300,000
We have the formula:
Good inventory = Total Inventory - Unsalable items = $8,436,508 - $2,300,000 = $6,136,508
The inventory turnover ratio the good inventory must maintain in order to achieve an overall turnover ratio of at least 6.3 (including the unsalable items) is
53,150,000/6,136,508 = 8.7
