Jim had a beginning inventory of $5,500. During the month of April, he purchased $4,000 of food and had an ending inventory of $3,800 at the end of the month. His sales for April were $8,750. What was his inventory turnover?

Question

Business

Nikolas Baker

9 August, 04:34

Jim had a beginning inventory of $5,500. During the month of April, he purchased $4,000 of food and had an ending inventory of $3,800 at the end of the month. His sales for April were $8,750. What was his inventory turnover?

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Answers (1)

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Jovany Bonilla · Answer 1

1.23

Explanation:

Inventory turnover is a ratio showing how many times a company has sold and replaced inventory during a given period.

Cost of Sales=Opening Inventory+Purchases-Closing Inventory

=5,500+4,000-3,800 = 5,700

Average Inventory = Opening + Closing/2

= 5,500+3,800/2 = 4,650

Inventory Turnover Ratio = Cost of Sales

Avg Inventory

= 5,700/4,650=1.23