Question

Goods available for sale are $40000, beginning inventory is $16000, ending inventory is $20000, the cost of goods sold $50000, what is the inventory turnover

Answer 1

Answer:

2.78

Step-by-step explanation:

Inventory turn over is the same as the inventory turn over ratio. Inventory turn over is defined simply as the ratio of the cost of goods that was sold (net sales) to the average inventory at the selling price.

Inventory turn over = Cost of goods/average inventory

Cost of goods sold = $50000

Average inventory = beginning of inventory + ending inventory/2

Average inventory = $16000+$20000/2

Average inventory = $36000/2

Average inventory = $18000

Inventory turn over = $50000/$18000

Inventory turn over= 2.78