Question

Sheffield Corporation had net credit sales of $14300000 and cost of goods sold of $9070000 for the year. The average inventory for the year amounted to $1814000. The inventory turnover for the year is__________.

Answer 1

Answer:

$5

Explanation:

Inventory turnover is the ratio of the cost of goods sold to the average inventory for the year. Mathematically,

Inventory turnover = cist of goods sold/Inventory for the year

Given cost of goods sold = $9070000

Inventory = $1814000

Inventory turnover = $9070000/$1814000

= $5

Answer 2

Answer:

5

Explanation:

Inventory turnover can be defined as the ratio of the number of time a company/firm/organization has sold and replaced its inventory during a given period of time.

Inventory turnover is calculated by dividing the cost of goods sold by the average inventory; i.e

Inventory turnover = cost of goods sold

                                      Avrg. Inventory

For the above question, the inventory turnover is calculated by using the formula above,

where,

cost of goods sold = $9070000

average inventory = $1814000

Inventory turnover = $9070000

                                $1814000

                             =    5.

The Inventory turnover for Sheffield corporation is 5.

that means  Sheffield corporation has sold and replaced its inventory 5 times.

Cheers.