Question

If a firm’s inventories on hand are $200,000, its cost of goods sold is $600,000, and its sales are $800,000, what is the inventory turnover?

Answer 1

Answer:

inventory turnover= 3

Explanation:

Giving the following information:

A firm’s inventories on hand are $200,000

The cost of goods sold is $600,000.

To calculate the inventory turnover, we need to use the following formula:

inventory turnover= cost of goods sold/ average inventory

inventory turnover= 600,000/200,000= 3