Question

​Elephant, Inc.'s cost of goods sold for the year is​ $2,000,000, and the average merchandise inventory for the year is​ $129,000. Calculate the inventory turnover ratio of the company.​ (Round your answer to two decimal​ places.)

Answer 1

Answer:

Inventory TurnOver = 15.50

Explanation:

$\frac{net \: sales}{average \: Inventory} = Inventory \: TurnOver$

Where:

$average \: Inventory = (beginning \: Inventory+ ending \: Inventory) \div 2$

In this case we are given with the average inventory so we can pass directly to calculate the turnover

2,000,000/129.000 = 15.50387597