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shutvik [7]
2 years ago
11

Use the following information:Net sales $ 240,000Cost of goods sold 172,000Beginning inventory 53,000Ending inventory 43,000Calc

ulate the inventory turnover ratio.
Business
1 answer:
mr_godi [17]2 years ago
5 0

Answer:

The inventory turnover ratio is 3.58 times

Explanation:

Inventory turnover ratio an efficiency ratio that indicates how many times a company sells and replaces its stock of goods during a particular period

Inventory turnover ratio is calculated by using following formula:

Inventory turnover ratio = Cost of Goods Sold/Average Inventory

In there:

Average Inventory = (Beginning inventory + Ending inventory)/2

In the company:

Average Inventory = ($53,000 + $43,000)/2 = $48,000

Inventory turnover = $172,000/$48,000 = 3.58 times

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